LOCAL wine and spirit giant KWV will be pocketing close to R50 million after the sale of its German subsidiary, Eggers & Franke, to Racke GmbH of Germany. The sale agreement of R83 million means a further step for KWV in its alliance with Racke.
The deal was concluded on 17 January and is a result of the new commercial strategy embarked upon by KWV’s CEO Thys Loubser and his team.
In his first year, Thys Loubser has implemented a new company structure, a new management team, new vision and strategy and a new distribution agreement in the USA. The German deal follows closely on this, as well as Thierry’s deal in the UK of late 2006.
On KWV’s side, the main focus of the deal is to grow its business in Germany. The company needs the expertise and volumes of Racke and Racke, in turn, requires an expanded product and distribution base in Germany and Europe which Eggers & Franke can supply.
Thus, it is a win-win situation for all three parties.
The deal encompasses KWV selling its entire shareholding in Eggers & Franke to Racke, whilst forming an alliance with the new entity as its channel to the German market for the KWV, Laborie and Golden Kaan wine brands.
The new entity will be known as Racke/Eggers & Franke and based in Bremen. It will be in a better position to grow the KWV brand offering in Germany, said Loubser.
Through this deal that began in 2000 with KWV and Racke’s joint venture, Golden Kaan, the relationship between these two companies will be strengthened.
“The transaction confirms that KWV’s new commercial strategy has the right focus, as does the fact that KWV’s own operations to end December 2007, are better than in the same period of the last financial year.”
