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Treasury Wine Estates (TWE) acquires California-based vineyard for $315m

By Mensholong Lepcha

09:35, 18 November 2021

Grapes ripe for harvest in a vineyard
Grapes ripe for harvest in a vineyard– Photo: Shutterstock

Australia’s Treasury Wine Estates announced the acquisition of California-based Frank Family Vineyards for $315m, helping stocks in the company close higher on Thursday.

The company said the deal will help strengthen its leading position in the US luxury wine market, having seen business conditions in its biggest export market deteriorate following a tit-for-tat tariff war between Australia and China.

Shares in Treasury Wine Estates closed 2.6% higher at AUD11.54 on Thursday. Its year-to-date gains come in at 20.6%, as of Thursday’s close.

EPS accretive

Treasury Wine Estates said Frank Family Vineyards has a “long-term track record of delivering strong revenue and earnings before interest and taxes (EBIT) growth in addition to EBIT margins in the range of 35-40%.”


2,049.33 Price
+1.710% 1D Chg, %
Long position overnight fee -0.0192%
Short position overnight fee 0.0110%
Overnight fee time 22:00 (UTC)
Spread 0.50


38,076.50 Price
+2.730% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Oil - Crude

76.92 Price
+2.370% 1D Chg, %
Long position overnight fee -0.0187%
Short position overnight fee -0.0032%
Overnight fee time 22:00 (UTC)
Spread 0.030


16,032.40 Price
+0.450% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

The Melbourne-based wine maker said the deal is accretive to its earnings per share (EPS) from the acquisition date, with EBIT growth expected from the first full year of ownership.

Treasury Wine Estates added the deal will be funded via a combination of debt and cash.

Read more: Business news: Global inflationary stress spooks US, UK markets

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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