Background

Established in 1843, Treasury Wine Estates (ASX ticker: TWE) is now one of the world’s largest wine companies, listed on the Australian Securities Exchange. As a vertically integrated business, TWE is focused on three principle activities: Grape Growing and Sourcing, Winemaking, and Brand-led Marketing. TWE’s business is concentrated on four principal regions. It has a portfolio of more than 70 brands and their products are sold across more than 70 countries.

[Source: https://www.tweglobal.com/about]

Your task

You have worked at an investment and consulting firm in Australia for almost a year. Your team leader, John was impressed by your report about AMP’s corporate governance and corporate social responsibility. Now, John wants you to team up with two other colleagues to write a report about TWE’s capital structure and payout policy, acquisition and restructuring activities, cost of capital, and value per share, amongst other things. He is also interested in recent IPO activities in Australia. You also need to present your results to your firm’s board of directors via a video presentation because of the Covid-19 lockdown. Your report should address the following points:

TWE’s acquisition and restructuring programs/plans and risk management:

(a) Discuss TWE’s recent acquisitions and restructuring programs/plans since 2015. What were the rationales for the acquisition and restructuring programs?

(b) Discuss TWE’s financial risks and the risk management strategies adopted by TWE to manage the risks.

(11 marks) (1000 words)

John is well-trained in finance and prefers reader-friendly financial reports written in a professionally manner. He expects your analysis to be rich in information and well structured. It should contain main points with the relevant descriptions and evidence from reliable sources or references. He also appreciates tables and/or graphs that help to illustrate the main points.

Helpful resources

§ TWE’s website and financial reports.

§ Potential data sources: (i) DatAnalysis from Deakin Library (ii) The Reserve Bank of Australia (RBA):
www.rba.gov.au
(iii) Yahoo! Finance: au.finance.yahoo.com (iv) The Australian Securities Exchange (ASX):
www.asx.com.au.

§ Seminars on the relevant topics.

§ Reports or opinion pieces written by financial analysts and/or portfolio managers.

§ Newspaper articles (e.g. The Age) and financial press (e.g. The Australian Financial Review).

§ Online search engines, such as Google and Yahoo!.