Mergers & Acquisitions in the Global Drinks Industry

 
 
 
 
Mergers and Acquisitions in the Global Drinks Industry

The large-scale mergers and acquisitions that have taken place in the global drinks industry within the past ten years have consolidated the ownership of some of the world's most significant wine and spirit brands into the hands of a few large companies. This is partly the result of increased globalization in the industry, and partly due to the usual strategy of companies seeking to continue delivering increasing returns to their shareholders as their corporations mature and their growth slows (Arno). However, in spite of the substantial consolidation that has already taken place, merger and acquisition activity in the global wine market is by no means over. A growing number of players want to become global wine producers and capitalize on the increasing demand for wine in developed and emerging markets (Cazin).

Perhaps the most telling evidence of the trend is the merger of MKF Group LLP, the U.S.-based wine business advisors and International Wine Consultants PTY, Ltd, the wine industry merchant bank. This merger was not effected to produce a new wine company, however, but the world's first global wine investment bank, Global Wine Partners (GWP), LLC (Talbert 1). Vic Motto, Chairman and CEO of GWP, explains why a global wine investment bank is needed in today's market. "The wine business is growing twice as fast as the general economy," he begins, then goes on to explain:

     
 
 
 
    

 

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