Majestic Wine is set to acquire rival Naked Wines in a deal worth around £70 million.
The agreement will allow Majestic to expand its online and e-commerce operations, something which Naked Wines has been specialising in over the years. Majestic wants to combine this level of expertise with its own network of stores across the UK. As part of the deal, Naked Wines founder, Rowan Gormley will become chief executive of the overall company.
It follows the departure of Majestic's previous chief executive, Steve Lewis, who vacated his post in February. Mr Gormley has a good track record of developing new businesses and has founded a number of high-profile ventures. He set up Naked Wines in 2008 but has been behind the launch of Virgin Wines, the Virgin ONE Account and Virgin Money.
Majestic believes that through this new partnership, it will be able to open up to new markets in the likes of the US and Australia. Entering these markets will allow Majestic and Naked Wines, which will operate as independent companies, to combine skillsets to gain extra revenue from previously untapped sources.
Mr Gormley praised the deal and said: "The combination of Naked Wines and Majestic provides the very exciting opportunity to build a world-class wine retailer, serving customers who are looking for inspiration that the supermarkets cannot provide.
"This is great news for the customers, staff and suppliers of both businesses and will ultimately create significant shareholder value."
Recovering share price
The deal is hoped to provide a boost to Majestic's share price, which has been steadily recovering throughout the course of Friday (April 10th). It opened on the London Stock Exchange at 290.75 but has since been slowing rebuilding and currently stands at 304.12 as of 09:53 BST.
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