Diageo acquires Chalone Wine Group

10/02/05 Diageo plc has announced that, following receipt of all necessary approvals, it has completed its acquisition of The Chalone Wine Group, Ltd.. Shareholders representing over 2/3rds of outstanding shares of Chalone common stock signed consents favoring the merger. Chalone is now a wholly-owned subsidiary of Diageo's North American operating company.

In connection with the completion of the transaction, Chalone's common stock ceased trading on NASDAQ at the close of US markets today, February 8th, 2005. As previously announced, Chalone's common shareholders will receive $14.25 per share in cash. Shareholders will also have the ability to join Chalone's Shareholder Cellars wine club and receive a one-time, non- transferable $1.00 wine credit per share of Chalone common stock they held prior to the merger for use within one year after the merger.

Diageo is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines, and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Jose Cuervo, Tanqueray, Captain Morgan, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines.

Diageo Chateau & Estate Wines is the US wine business of Diageo and produces and markets premium wine brands such as Beaulieu Vineyard, Sterling Vineyards, Sterling Vintner's Collection, Solaris, Century Cellars, and Blossom Hill, as well as the French wines of Barton & Guestier. The company is also a leading importer of classified Bordeaux in the US. The selection of imported wines is complimented by F.E. Trimbach wines from Alsace, a collection of Burgundy estate-bottled wines and several other European wines.

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