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Japanese Investors Involved in Sales of 2 Napa Wineries

Times Wine Writer

Two more Japanese investors are purchasing two super-premium Napa Valley wineries, bringing to seven the number of California wineries now owned by Japanese interests.

In the larger of the two deals, Kirin Brewery Co. of Japan has agreed to purchase the Raymond Vineyard & Winery for an estimated $18 million. Whitehall Lane Winery, just up the road from Raymond, has been acquired by a private Japanese citizen, owners of the Napa Valley winery announced. An industry source estimated that Whitehall sold for about $5 million.

The deals are the sixth and seventh since 1984 in which Japanese investors bought California wineries and the fourth and fifth in the Napa Valley in the past 18 months.

In both winery deals, the sellers say they will remain with their respective wineries, and both used the identical phrase: “Nothing will change.”

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The Raymond deal is expected to be completed some time in November, according to a source close to the winery. The Whitehall Lane deal concluded earlier this week, according to wine maker Art Finkelstein.

Raymond was founded in 1974 by Roy Raymond Sr., who was married to Martha Jane Beringer, granddaughter of Jacob Beringer, one of the founders of the Beringer Bros. winery in St. Helena. The Raymond winery is operated today by Roy Raymond Jr., who handles viticulture and marketing, and his brother, Walter, who is the wine maker.

A source close to the negotiations said management of the winery would continue without change--exactly the same way the previous four Japanese buyers of California wineries have operated.

The source said Hambrecht & Quist, a San Francisco investment banking company, assisted in the transaction, but Jean-Michel Vallette, of the firm, said he could not discuss unannounced transactions. “But Raymond is one of the largest super-premium wineries in the Napa Valley and as such is certainly an attractive company.”

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Large Production Capability

Raymond has 100 acres of land south of St. Helena, including 75 acres planted in premium wine grapes; a new winery building with stainless steel fermentation tanks that can accommodate more than 300,000 gallons; 4,000 French oak barrels, and a tasting room.

The winery produces and sells about 135,000 cases of wine, 80,000 cases of its Chardonnay under four designations--Reserve, Napa Valley, California and LaBelle, the latter a second label. The winery also is a premium producer of top-quality Cabernet.

As a teen-ager, Roy Raymond Sr. moved to the Napa Valley from Marin County months after the repeal of Prohibition in 1933. He was a friend of the Beringer brothers and decided he wanted to harvest grapes that summer. He never went home.

Whitehall Lane was founded by Art Finkelstein and Allan Steen, who are brothers, in 1979 and produced its first wines in 1980.

The buyer of Whitehall Lane is Hideaki Ando, a real estate investor who maintains residences in Japan and San Francisco.

“This is a totally passive investment for Mr. Ando, and no changes are anticipated,” said Jon Fredrikson of Gomberg, Fredrikson Associates, the San Francisco firm that handled the deal. “Mr. Ando has already brought in orders for Whitehall Lane’s wines at a dozen top restaurants in Japan.”

The first major Japanese acquisition of a California winery was in 1984 when Chateau St. Jean in Sonoma County was bought by Suntory Ltd. in a deal estimated to be worth $40 million.

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Subsequently, in 1986, Ridge Vineyards was bought by Otsuka Pharmaceutical and then in 1987 St. Clement was acquired by Sapporo Brewing Co. and Markham Vineyards was bought by Sanraku. The small Louis Mihaly Winery in the Napa Valley was sold to Japanese investors last March.


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