British beverages major Diageo is set to offload its wine interests in Argentina to Grupo Penaflor for anundisclosed sum.

Under the terms of the agreement, Grupo Penaflor will acquire Diageo’s Navarro Correas and San Telmo wine brands, together with production sites and vineyards.

Additionally, Penaflor will serve as the distributor of Diageo’s international spirits brands.

After serving a certain period as distributer, Penaflor will co-produce with Diageo its domestic spirits brands in Argentina, said the company in a statement.

The deal is expected to enhance Diageo’s route to market while accelerating the performance of Diageo’s brands in the region.

Subject to regulatory approvals, the transaction is expected to be completed early in 2016.

The news coincides with the Treasury Wine Estates (TWE) securing approval from US Federal Trade Commission (FTC) for the acquisition of Diageo’s wine business including Beaulieu Vineyards, Sterling Vineyards, Acacia, Provenance and Hewitt.

Additionally, the Australian wine company will acquire the UK wine brand Blossom Hill, considered to be one of the largest wine brands selling in the UK in terms of volume.

Diageo’s wine business represents a mere 4% of its total revenues.

Reportedly, the company has been divesting its interest in the wine business to focus on its spirits division.

Image:Diageo’s wine business represents a mere 4% of its total revenues.Photo: courtesy of Stoonn/ Freedigitalphotos.