Yantai Changyu Pioneer buys Australian wine producer

Yantai Changyu Pioneer, one of China's oldest wineries, will buy an 80 percent stake in Australia's Kilikanoon Estate Pty for AUD$ 20.605 million, its first foray into the Australian wine market, according to an announcement issued by Changyu on Dec 11.

Established in 1997 by Mort Mitchell and his son and chief winemaker Kevin Mitchell, Kilikanoon is a boutique wine producer exporting to over 25 countries. In 2013, it was named by James Halliday's Australian Wine Companion, a definitive online guide to wine in Australia, as "Winery of the Year".

The deal saw the exit of major shareholder Nathan Waks and other minority shareholders from Kilikanoon, while Kevin Mitchell and managing director Warrick Duthy will continue to keep a small stake in the business.

The sale gives Kilikanoon a strong business backing and a direct entrance to the Chinese market, Warrick Duthy said, adding that the combination of the Kilikanoon name and quality along with Changyu's abilities will make a powerhouse partnership.

Changyu first visited Kilikanoon in November 2016, and was full of praise for what Kilikanoon had achieved in its short 20-year history. Changyu initiated partnership discussions early in 2017. As the investment is subject to Chinese government approvals, settlement of the transaction is planned for mid-January 2018.

Based in Yantai, East China's Shandong province, Changyu has assets in eight Chinese provinces and has made wine for the domestic market since 1892. In recent years, the company has been looking to support its overseas expansion by expanding its network of wineries in other countries. It has spent millions buying up vineyards abroad, making acquisitions in France, Spain and Chile.