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Of the many recent mergers and acquisitions, three of the most prominent in the global wine and spirit industry were those undertaken by FosterÆs Brewing Group, which merged with Beringer Blass; Constellation, which bought Mondavi; and Diageo, which acquired the Chalone group. The Beringer deal is especially significant because it represents the first major cross-border step toward global consolidation (Goldman). FosterÆs Brewing Group, an Australian beer company, had already branched out and was selling both wine and beer at the time it took over Beringer. Walt Klenz, Beringer BlassÆs managing director and president, decided to take the company public with an initial public offering (IPO). Klenz felt that the economies of scale and the ability to have a critical mass of products and volume for distributors were the primary advantages behind taking Beringer public. The major pluses for the IPO were improving the balance sheet, faster growth potential via acquisitions, and first-mover advantage for becoming a big premium winery. The combining of FosterÆs Group and Beringer Blass resulted in the creation of the largest premium wine company in the world (Gilinski, Jr., et al. C-433-C-437). Beringer enjoyed a diversification of its wine brands and has had excellent growth since then, ranking number five in WBMÆs top 30 U.S. wine companies of 2004 (ôThe Top 30 US Wine Companies of 2004ö) and earning numerous awards (Gilinski, Jr., et al. C-440). BeringerÆs managing director, Dan Leese, states that Beringer will be reinvesting in marketing its core brands in 2005. "We're going to get very aggressive and innovate," he said. "We have some things we think are pretty exciting that will attract new consumers" (Penn & Fisher).
The 2004 merger between Constellation and Robert Mondavi Winery was another mutually advantageous deal that gave Constellation an edge in the marketplace based on size. Robert Mondavi Winery was the ...