February 14, 2014

Emperador unit buys into another Spanish brandy firm

In a press statement, EMP said its Spanish arm Grupo Emperador Spain has acquired 50% of Spanish brandy firm Bodega Las Copas for EUR60m (P3.7b) from Grupo Byass. The company has a 275-ha vineyard near Toledo that utilizes advanced sustainable growing practices, distillery and brandy production facilities.

Emperador has previously acquired Spanish brandy producer Bodega San Bruno also from Grupo Byass. This deal is part of Emperador’s P5.8b capex budget for expanding its Spanish asset portfolio.

Our Take: It appears that the purpose of this deal is more to acquire viniculture technology and not just an outright expansion of capacity. To the extent that it allows Emperador to realize efficiencies and better yields, we view the acquisition positively.

The output of Las Copas will be sold on the global market as well (and not bottled as Emperador Deluxe as was the case in previous deals). This should also provide Emperador access to technology and portfolio diversification. – WealthSec