Diageo sells wine businesses for 320m pounds

The sale of US-based Chateau and Estate Wines and the UK-based Percy Fox businesses will reap net proceeds of roughly £320m when it completes later this year that the FTSE 100 group will use to pay off debt.

Once it has completed this sale, Diageo will have released £1bn through selling non-core assets since the start of the financial year, chief executive Ivan Menezes said.

Earlier in the month it divested its 57.9% stake in Jamaican Red Stripe brewer Desnoes & Geddes and Guinness Anchor Berhad to Heineken for around £515m.

"Diageo's strategy is to drive stronger, sustained performance through focus on our core portfolio and today's announcement is another element of that strategy in action. Wine is no longer core to Diageo and this sale gives us greater focus," Menezes said.

He added that this proactive portfolio approach has "focused the business, enhanced our financial strength, improved our returns and strengthened the business, positioning us even more firmly to deliver our performance ambition".

Once Wednesday's agreed sale has been completed, the group's wine interests will be limited to Justerini & Brooks Wine Merchants, the Argentinian wine business of Navarro Correas, the wine brands of Mey Icki and USL, the Chalone brand and assets and the Acacia winery and vineyard.