Yet another iconic wine estate has slipped out of the hands of a historic California family.
Acquisition-thirsty Foley Wine Group of Los Olivos on Monday said it had bought Sebastiani Vineyards, a Sonoma winery that had passed through generations of family members over the span of 104 years.
A slumping market for higher-priced wine, the lack of a clear succession plan and years of division among the third generation of Sebastianis were behind the sale, according to people familiar with the transaction.
The terms of the sale of the winery and its 230 acres were not announced. But industry sources say Foley paid $50 million for the company to the families of the three grandchildren of founding patriarch Samuele Sebastiani.
"This was not a unanimous decision and it was somewhat contentious, but the family came together and decided in a collegial manner," said Don Sebastiani, who represented one of the three family branches in the sale. He declined to say how he voted or offer more details.
Similar issues have tripped other famous California wine families. Infighting among Robert Mondavi and his sons combined with poor management and financial choices to force the $1-billion sale of the landmark Napa Valley winery to Constellation Brands Inc. in 2004.
In 2002, E. & J. Gallo Winery bought the Louis J. Martini winery from the Martini family.
Founded 75 years ago, the brand was once one of California's most respected.
But the family was unable to keep pace with shifting tastes -- such as the growth in white Zinfandel -- and increased competition from within California and imports.
That year, Gallo bought the Mirassou brand from one of the oldest winemaking families in the U.S. At the time, fifth- and sixth-generation family members worked at the winemaker.
"Most of these old-name family wineries have struggled with generational change," said Vic Motto of Global Wine Partners, a St. Helena, Calif., investment bank that specializes in wine industry transactions. "It is hard for the children to take over from a strong entrepreneurial patriarch."
Sebastiani Vineyards sells about 280,000 cases of wine annually, which deprives it of the heft of a mass-market producer as well as the cachet and nimbleness of a small artisan or boutique vintner, Motto said.
With the acquisition, Foley Wine Group will increase its sales to about 500,000 cases across multiple labels.
