New Delhi, March 26 -- India's largest wine producer, Sula Vineyards, has agreed to acquire Moet Hennessy India (MHI) Private Ltd's Nashik estate for Rs 20 crore (approximately $2 million) to bolster its wine tourism and push its next phase of growth. MHI is the wines & spirits division of Louis Vuitton Moet Hennessy, the Paris-based luxury goods conglomerate.

MHI, which produces sparkling wine under the Chandon brand, will sell its sole 19-acre wine production facility, Domaine Chandon India in Dindori, Nashik, which has an annual capacity of 4.5 lakh litres.

This marks the cessation of wine production and the Chandon brand by MHI, a company statement said. Established in 2014, Chandon India is the premium sparkling wine brand owned and operated directly by MHI.

The facility, which can be further scaled up to 13 lakh litres, also consists of an ultra-premium visitor centre, a banquet facility, and 5 acres of vineyards, offering a "premium immersive wine tourism platform", the statement added.

Operations at the Nashik facility will begin upon handover of the estate to Sula, with wines produced bearing the Sula insignia.

The acquisition, conducted through Sula's subsidiary Artisan Spirits Pvt Ltd, will include Hennessy India's Nashik estate land, building, and winemaking infrastructure, excluding brand-related assets.

The transaction, funded through internal accruals and debt, will take place in two tranches and conclude by June, subject to regulatory approvals.

Sula will also pay an additional amount to acquire the proposed inventory, the company said in a notice to exchanges, adding that the quantity and the amount will be decided closer to the transaction's closing date.

Sula currently commands around 50% of the domestic premium wine market. Sula's Nashik campus boasts being the most visited vineyard destination globally, with over 3.5 lakh footfalls annually. Sula Vineyards' hospitality portfolio includes three luxury resorts in Nashik-The Source, Beyond, and a recent addition, The Haven, have a combined 154 keys.

Among the deals in the segment, last July, Mumbai-based Tilaknagar Industries Ltd, which sells Mansion House Brandy, agreed to acquire the 25-year-old Imperial Blue brand of whiskies from Pernod Ricard India Pvt Ltd for €412.6 million (about Rs 4,150 crore or $486 million).

Published by HT Digital Content Services with permission from VC Circle.