Emperador buys 50% of Spanish brandy maker
MANILA, Philippines—Tycoon Andrew Tan-led liquor firm Emperador Inc. has expanded its offshore business by buying a 50-percent stake in brandy producer Bodega Las Copas S.L., a unit of Spanish sherry producer González Byass, for P3.7 billion.
In a disclosure to the Philippine Stock Exchange yesterday, Emperador said its subsidiary, Grupo Emperador Spain, had struck a deal to acquire half of Bodega Las Copas, a fully-integrated brandy producer in Spain.
Bodega Las Copas’ operations in brandy-making run a full scale, with a vineyard near Toledo, distillery plant in Tomelloso, Ciudad Real and its Las Copas brandy production premises in Jerez, the company said in the disclosure said. It is part of the González Byass group, which was founded in 1835 and now one of the largest sherry, wine and brandy producers in Spain.
“With González Byass and Grupo Emperador joining hands, we are combining more than 200 years of experience in brandy- and wine-making. By bringing together the markets of both companies, we have created a sizable global brandy market base that enables us to more aggressively pursue improvements in our brandy production, and invest in modern vineyard technology and innovation on a very large scale. This will give us a very good advantage in brandy production over others,” said Jorge Domecq Bohórquez, managing director of Emperador International.
The 275-hectare specialized vineyard project of Bodega Las Copas near Toledo grows the “finest grapes dedicated exclusively for brandy distillation and production,” according to the disclosure. The pioneering vineyard uses “sustainable, state-of-the-art technology, an innovation that will improve the company’s efficiency in producing top-quality brandy.”
Jose Mari Lacson, head of research at local stock brokerage Campos Lanuza & Co., said the new acquisition should help sustain Emperador’s growth momentum. It also reflects the shift in the business portfolio of parent conglomerate Alliance Global Group Inc.
“It is still too early to say if this investment will be value-enhancing to the group. We can speculate that they got it cheap as this may be a distressed asset acquisition given the economic conditions in Spain. Also, this boosts the brandy production capacity of Emperador and should reduce costs given the increase in economies of scale,” Lacson said.
But with the 50-50 percent split in ownership structure, Lacson said it would be interesting to know how much control Gonzales Byass would cede to Emperador in terms of operations and financing.
“Minority investors do not really know the condition of the overseas acquisition. That’s the risk given the current information. But since Gonzales Byass is not fully exiting from Bodega, it implies that it is likely to be more of a gold mine than a money pit,” Lacson said.
The Philippine Stock Exchange suspended trading on Emperador starting at 9 a.m. Thursday pending the submission of a more comprehensive disclosure on the transaction.
