Located in the Riverland wine region, the Loxton winery was first established as a co-operative in 1948 and has since been upgraded and modernized. The additional capacity of 90,000 tons of the Loxton facility will help The Wine Group (TWG) to support the growth of the company’s portfolio of fast growing Australian wine brands and expand its Australian bulk wine offers to its global network of bottlers. It’s already sourcing from Australia brands like Fish Eye, Little Roo and Foxhorn which is America’s top popular-priced Australian brand, according to the management-owned buying company.
Purchase of the fourth largest winery of Australia was perhaps the defining moment in the history of the erstwhile leading wine producer of India- Indage Vintners. This was an action that caused or coincided with the downfall of Indage though it must have strategized the acquisition, planning to reach closer to the top guns of the world wine industry, in an effort to become a global player.
Indage had agreed to acquire the Loxton winery in South Australia from Australian Vintage for A$60 million in March 2008. The sale was to be completed by September that year but was subsequently deferred until October when Indage had said that it would be unable to complete the purchase of the winery by the contracted date but remained committed to the acquisition.
Indage had confirmed to delWine that the deal would be completed but knowing the financial condition of the company and the ensuing recession, we had expressed serious doubts about the deal being completed. It seemed unlikely that they would be able to raise the finances from the alternate sources.
The industry experts in Australia and India had expressed surprise at the timing and the price settled at that time and the wisdom of Indage getting into the unknown, highly competitive industry plagued with wine glut. It had already bought Tandou wines in South Australia in 2007 and renamed it as Thachi wines which later reportedly supplied it bulk wines for part of its domestic production.
In April 2009, Australian Vintage said Indage had failed to complete the acquisition and subsequently took them to court. Under the settlement reached within four months, Australian Vintage was awarded an undisclosed amount that would be used towards purchase of wine from Thachi (Tandou). This was in addition to the $6 million non-refundable deposit previously paid to Australian Vintage by Indage for the Loxton acquisition.
The current transaction is expected to be completed by this Thursday, August 18.
For earlier related articles on the acquisition by Indage, read
Indian Vintner settles with Australian Vintage
http://www.indianwineacademy.com/e_magazine/delwine_265.asp
Indage Puts Loxton Deal on Hold |