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Business

Washington wine giant Ste. Michelle sold for $1.2 billion

The French-style inspired main building of the Chateau Ste. Michelle winery is seen in Woodinville in 2019.
Elaine Thompson
/
The Associated Press file
The French-style inspired main building of the Chateau Ste. Michelle winery is seen in Woodinville in 2019.

Ste. Michelle Wine Estates has been sold by its parent company, the tobacco company Altria, to Sycamore Partners, a private equity firm based in New York, for about $1.2 billion in an all-cash deal.

Woodinville-based Ste. Michelle describes itself as the nation’s third largest wine company, farming nearly 30,000 acres across Washington, Oregon and California and selling wines under labels including Chateau Ste. Michelle, 14 Hands, Columbia Crest, Erath, Intrinsic and Patz & Hall. It is the largest wine company in the Northwest.

The Seattle Times reports its growth has stalled, however, in the highly competitive wine industry. Ste. Michelle’s sales slipped from $691 million in 2018 to $689 million in 2019, with operating income turning from a $50 million profit to a $3 million loss. Then, during the pandemic shutdowns of 2020, Ste. Michelle’s sales fell to $614 million and it reported a steep operating loss of $360 million.

Altria, which owns major cigarette brands such as Marlboro, said it will use the sale’s proceeds to buy back stock. CEO Billy Gifford said shedding the wine company is part of its plan to focus on “moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices” like noncombustible nicotine products.

Anna King of Northwest Public Broadcasting contributed to this report.

Wines from the Ste. Michelle Wine Estates are displayed.
Credit Michael Conroy / The Associated Press file
Wines from the Ste. Michelle Wine Estates are displayed.