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Pocket Guide

Sale and purchase of vineyards

New Edition October 2015

Pocket Guide written by

October 2015

PwC Société d’Avocats, Member of the International Wine Law Association

Arnaud AGOSTINILawyer, Partner, Wine Industry

Paule CATHALALawyer, Director, Wine Industry

Stéphanie VERSCHAVELawyer, Manager, Wine Industry


Pocket Guide


This pocket guide is devoted to wine property transactions.

A guide, for what?

Simply to list the main issues deserving consideration and vigilance for both sellers and purchasers of wine properties, in a simple and easy-to-read manner.

Many techniques used for vineyards transaction are certainly similar to those commonly used in transactions relating to other economic activities.

This is true as far as the overall methodology is concerned, especially: due diligence, timing of the operations and structure of the legal documentation (stock purchase agreement, letter of intent, period of exclusivity, warranties etc…).

However, there are very specific technical, economic, legal and tax rules that lead professionals to get general skills but also an in-depth knowledge of the wine industry and its specific regulations.

This is very important for the drafting of the legal documentation and for the precautions to be taken to ensure a perfect completion of the deals we make on behalf of our clients.

Have a pleasant reading!

Summary

Who are the different players in the transaction? 5

The Advisor (real estate agent, banker) 6

The Experts 6

The Lawyer 7

The Auditor and the Accountant 7

The Notary 7

How to determine the scope of the sale/purchase? 9

What are the preliminary steps in a transaction? 13

Preliminary steps for the Vendor 14

Preliminary steps for the Purchaser 16

What are the due diligences in a winemaking transaction? 17

Overview of investigations 19

Specific points of vigilance in a wine property transaction 24

Sale and purchase of vineyards – 5

What about the regulations ? 28Prior administrative authorization

What are the principal documents to sign? 30

Listing agreement and property description 31

Letter of interest and firm offer 33

Preliminary sale agreement 35

Asset and liability guarantee 37

Final deeds of sale 39

What are the keys of success of your transaction? 41

Who are the different players in the transaction?


8 – Pocket Guide PwC

The Advisor (real estate agent, banker)It is important for a real estate agent to have proven experience in the field of wine-making transactions and to demonstrate that he complies with the provisions of the French property law (loi Hoguet).

The agent will play an important role in determining the sale price and this is a crucial factor in ensuring the sale's success.

He should not be tempted to propose a price which is too high compared to the market as this often results in deterring potential investors and provoking market disinterest in the property. Furthermore, this may lead the sale of the vineyard to be put on hold until market interest revives. Nowadays, no investors buy blindly.

The ExpertsIn general, a wine property transaction requires experts’ intervention in the following areas:• audit and valuation of the property carried out by a property

expert: inspection of the quality of the property (vineyard, facilities…), of the compliance with specific rules (AOC, density of planting, grape varieties…)

• wine inventory, tasting and checking of the quality of the wine carried out by a wine broker (especially in Bordeaux) or an oenologist

• environmental inspection of the cellars carried out by a specialized laboratory: search for polyphenol component

• environmental inspection of the buildings carried out by specialized experts: asbestos, lead, termites…

• expertise of the Château by an architect



The LawyerThe assignment of the lawyer consists of:• advising for all the steps of the transaction• making legal, tax and labour audits• coordinating the different experts and making the synthesis

of their conclusions• negotiating and drafting the legal documents• structuring the acquisition of the purchaser

The Auditor and the AccountantTheir different assignments consist of:• making a general accounting and financial audit• preparing (for the vendor) or challenging (for the

purchaser) the business plan prepared by the seller• checking the calculation of the final price• preparing a business plan for the purchaser

The NotaryIn general, the assignment of the notary consists of:• drafting the notary documents: the parties need a notarial

deed only for the sale of real estate (not for the sale of shares)

• certifying the deeds of the real estate and check the property charges (mortgage…)

• drafting notarial proxies if necessary



How to determine the scope of the sale/purchase?



The owner of the property may be a person, people, a company, a group of companies, a division or some other form of business entity (see the different organization charts).

Example 1

"GROUPEMENT FONCIER AGRICOLE (GFA)"

The owner of the wine property

Agricultural company

Example 2

Individual owner of the wine property

(no company)


Lease

Lease



Example 3

"GROUPEMENT FONCIER AGRICOLE (GFA)"Owner of a part of the wine property

Individual owner of a part of the wine property (no company)


Example 4

"GROUPEMENT FONCIER AGRICOLE (GFA)"Owner of a part of the wine property

Individual owner of a part of the wine property (no company)

Individual grower

Example 5

Property and management company

Consequently, the scope of the sale may be real estate and other assets, shares or both.

We determine the scope of the sale:• for the vendor: in general according to tax consequences,• for the purchaser: usually according to registration taxes,

tax constraints “SAFER” rights, authorization of growing…

Lease

Lease

Lease

Lease



What are the preliminary steps in a transaction?



Preliminary steps for the VendorThe vendor must be interested in:

Calculating the tax consequences of the saleOften, the sale of assets or shares will not have the same tax consequences.

The French agricultural tax rules are specific according to the organization of the wine property. Agricultural activity is considered in France as a civil activity as opposed to a commercial activity (for example wine trade by merchants).

Generally, most of the agricultural companies are “civil” companies (société civile d’exploitation agricole, EARL, GFA…) as opposed to commercial companies (SA, SAS, SARL). The “civil” company is subjected to partnership tax rules (that means that the shareholders pay personally the taxes of the company as opposed to corporate income tax where the company pays the taxes). However, the “civil” company may choose to be subjected to corporate income tax rules.

The taxation of capital gains and the rules of taxation will be different according to the tax regime and according to the national or international rules.



Conducting due diligencesSometimes the vendor understands the interest in conducting due diligences before puting the wine property up for sale.

The results of these due diligences enable:• the preparation of the transaction file for an optimal

presentation of the wine property• the collection of all the information the vendor will have to

provide to the purchaser• the regularization of irregular situations• the declaration of the significant irregular situations to the

purchaser to limit the negative impact on the price: decrease in the price, loss of trust

Thinking about post transaction and preparing itThe family organization after the sale may be optimized before the sale. For example, if the vendor would like to donate to their children a part of the capital he will receive, he may find an interest in making this settlement before the sale (usually a tax interest: tax exemption).

An agreement has to be found and signed before the kick off of the process of sale concerning the sharing out of the money between several vendors, several business entities, owners without usufruct and usufructuary.

In the same way, it is often important to sign an agreement concerning the organization of the sale process if you have many vendors because the agent or the purchaser and his advisors do not want to discuss with all the vendors. The agreement determines the ability and obligations of their representative(s).



Preliminary steps for the PurchaserThe purchaser has to negotiate enough time to carry out audits before sending a binding offer to the vendor.

The purchaser will conduct due diligences to provide him with information on the target, on the basis of the information made available by the vendor.

The results of the different audits enable to:• make or not a binding offer to the vendor• negotiate the price with full knowledge of the facts• appreciate the interest to buy real estate or shares• calculate the purchasing costs• negotiate the purchasing conditions• negotiate the guarantees given by the vendor

What are the due diligences in a winemaking transaction?



In this section, we will review investigations to be carried out by a vendor or purchaser, prior to a wine-making transaction.

These investigations, also known as "acquisition audit, reviews, due diligence or VDD (vendor due diligence)", are more frequently carried out by purchasers than vendors.

It is generally difficult to get a vendor to see the point in reviewing their documentation which they often believe to be in perfect order. Vendors to have undertaken this step do not regret it and can see a positive effect on purchasers when presented with complete documentation or which immediately reveals any risks.

A review of transaction documentation involves drawing up an assessment of the property for sale and identifying strengths more particularly weaknesses.

A multidisciplinary team is required, comprising technical experts, auditors, lawyers, notaries among others.

This team, specialized in the wine industry, must be able to work together closely. It is often the agent and/or the lawyer who coordinates the work of the various experts.

The reviews are always specific and adapted to the type of transaction, the client's needs and the circumstances of the deal.

The investigation objectives may be classified as follows:• to gather sufficient information to provide the agent and

purchaser on the property for sale,• to precisely understand the situation of the property for sale

and the potential risks concerning its organization, the state of business, the assets including the vineyard, buildings and its compliance with industry specific regulations,



• to gather precise information on the legal environment, operational feasibility conditions (administrative authorizations, third party consent or preferential rights),

• to verify and provide information concerning the inventory of goods, real estate deeds, specific rights (appellation, classification, labels, etc.),

• to provide negotiation tools for financial and other clauses such as: price, payment terms and conditions, guarantees, financial guarantees on seller warranties, etc.

Overview of investigations

Technical due diligence

1. Audit and valuation of the wine property: inspection of the quality of the property and the compliance with specific rules

The property expert gives:• a description of each plot and groups these plots into several

categories according to their location, their condition (size, density of planting, grape varieties, etc.), the quality of the terroirs, comparison with the "Casier viticole",

• a description of each building, their conformity with environmental rules (wine effluent – waste), their organization,

• a description of facilities and their state.

According to these investigations, the expert values the wine property.

The empirical method based on a direct comparison approach is the most relevant method for this type of asset. The valuation is carried out using comparisons with recent transactions in the same location.



The expert carries out a market study in order to list the most significant transactions in the same location and the same appellation, referred to as elements of comparison. The study is based on research and analysis of sales of similar and comparable vineyards. Information about vineyard prices is given by notaries and SAFER (Sociétés d'aménagement foncier et d'établissement rural), and classified by appellations.

2. Wine inventory, tasting and determination of the quality of the wine

Usually, in Bordeaux, this assignment is given to an official wine broker.

In other locations, it is performed by an oenologist. If the purchaser and vendor are industry professionals, they will generally assess the quality of the wine themselves.

The wine broker, or the oenologist, goes to the wine property to choose the samples of each vintage. The expert then tastes the different samples of wine often at a laboratory in optimal conditions.

The expert's assignment consists of:• advising on the quality of the wine and testifying that the

wine is "droit de goût, loyal et marchand" which signifies that it complies with the quality required for this category of wine,

• advising on the positioning of the wine in the market,• giving a valuation of the wine.

Analyses on the wine may also be required.



3. Environmental inspection of the cellars: PCP – TCA

Wood treatment can generate pollution that gives the wine a bad taste (PCP-TCA above a certain rate). This pollution can be located in particular in wooden frames, wooden pallets and other wooden equipment.

If the wooden material sold is polluted, it would be possible to engage the liability of the vendor. The verifications concerning this pollution are carried out by specialists. If the pollution is noticed, measures, requiring varying levels of costs, must be taken.



4. Building inspection

Asbestos, lead, termites, etc.

French legislation requires vendors of buildings to carry out certain inspections to detect the presence of asbestos, lead and termites and to communicate the reports on these inspections to the purchaser.

In the event of the sale of shares in the company which owns the buildings, it is strongly advised to have these inspections performed and all the more so when that the buildings comprise a major assets in a wine-making transaction.

Effl uents

The evacuation and treatment of effluents must meet certain obligations, in particular for a vathouse which exceeds a fixed capacity.

Classifi ed facilities

When production capacity is greater than 500 hl/year and less than 20,000 hl/year, the winegrower must file a declaration with the relevant authorities.



Financial and accounting due diligenceThe financial and accounting due diligence consists of checking:• the valuation of the wine inventory (production costs),• profit and loss accounts to ensure the consistency of the

figures and forecasts provided by the vendor,• the business plan prepared by the vendor,• the provisions in relation to the results of the legal and

technical due diligence.

Legal, tax and labor due diligenceThe legal, tax and labor due diligence consist primarily of checking the legal organization of the property for sale, the shares of the owner of the buildings and the charges and servitudes relating thereto, major contacts binding the sale structure, tax systems, and in identifying any risks relating to taxes, employment contracts, etc.



Specific points of vigilance in a wine property transaction

Real estate (vineyards)The legal due diligence on wine real estate consists of checking the deeds of the wine property to ensure the identity of the owner, and the consistency between the notary deeds, the land register, the real estate register and the “Casier viticole”. It is not rare to find inconsistencies between these documents and it is essential to understand the underlying reasons More often than not the vendor is unaware of this situation.

In France, the vendor of a building must produce a title to the property covering a thirty-year scope, through which the owners of the property can be identified for the last 30 years. In the event of a sale of shares of a company owing a wine-making property, there is no obligation to produce this deed but it must be requested, as the buildings and undeveloped real estate owned by the company comprise the actual object of the sale of in the wine-making transaction.

The legal due diligence of the vineyard consists of:• providing information on the encumbrances (mortgage) and

easements,• providing information on the right to a vineyard

appellation.

The right to produce and to sell wine under an appellation is subject to different conditions fixed by decrees and the new “Cahiers des charges” (list of specific rules of each appellation):• geographical localization of the vineyard in the AOC area,• authorized grape varieties, vinegrowing (vine cutting…),

density of planting, yield per hectare,



• conditions of pressing,• conditions of ageing,• wine labeling,• etc.

In wine-making transactions it is now systematic to request that the French national institute of origin and quality (Institut national de l’origine et de la qualité – INOQ) issue a certificate confirming that the plots for sale are located within the applicable appellation.

The various investigations to verify a vineyard's compliance should be carried out in conjunction with agricultural experts.

Wine brandThe audit on wine trademarks consists of:• taking an inventory of trademarks used and/or registered

by the entity operating the vineyard,• checking the compatibility of regulations pertaining to wine

trademarks. The rules applicable to wine trademarks consist of a complex mix of French and European regulations and numerous case-law precedents in various areas (trademark law, regulations on AOC, health regulations and labelling matters, etc.).

There are restrictions placed on the use of names of "château" ("clos", "domaine", etc.) within the same domain. The wine trademark is often toponymic and inseparable from the name of the property.



Leases and other occupancy agreementsLeases concerning agricultural matters are subject to a particular public policy status. Current leases should be checked for compliance with the rules of rural leases in the French Rural Code (Code rural).

Other occupancy contracts also exist such as an agreement making land available for use, ready for use or free loan for use, SAFER lease, small plot lease, etc.

Special attention should be paid to these agreements to verify that they cannot be reclassified as a rural lease and that the company being sold benefits from the right to continual use (e.g., in the event a lease is made available).

Summary and investigationsThe vendor must be informed of the due diligence being carried out by the purchaser in order to ensure that its documentation is ready and in order.

Well-prepared documentation can avoid negotiations to lower the price or to increase the vendor warranty granted to the purchaser in the event of the sale of shares in a company.

This preparation can therefore ensure that:• the agent is provided with reliable information to be

included in the presentation documentation,• all information is gathered by the vendor in order to be

provided to the purchaser,• irregular situations are resolved before the documentation

is presented to the purchaser. If any issues cannot be resolved, they must be declared to the purchaser. A vendor who does not declare an irregular situation, such as non-compliance with the specifications of the AOC management body, puts themselves in an extremely bad position that often results in failed negotiations or a large price reduction.



The vendor must remember that a successful transaction depends on a trust-based relationship between the parties. The purchaser's discovery of any irregular situations will put an end to this trust and will result in negative consequences for the vendor.

The purchaser must take the time to properly carry out the required audits before giving a firm offer to the vendor.

Based on the information provided by the vendor, the purchaser will perform its own verifications in order to be familiar with the property for sale.

The results of the various audits will allow:• the vendor to decide on whether or not to make a firm offer,• price to be negotiated based on audit results (especially but

not only technical due diligence),• the interest of purchasing a real estate property or property

shares to be assessed,• the purchase cost to be calculated,• the purchase conditions to be negotiated,• the seller warranty to be negotiated.


What about the regulations?

What about the regulations?


The purchaser has to obtain a prior authorization concerning some operations modifying the structure of vineyards: it is an authorization of growing (“autorisation d’exploiter”). This authorization is delivered by the “Préfet” through the CDOA (Departmental Commission of Agricultural Policies). It is necessary to determine if the projected acquisition is subject to this authorization.

Then, depending on the scope of the acquisition, the SAFER (entity representing the French Administration) have a pre-emptive right on the projected operation.

Also, there is specific regulation when the purchaser does not have the nationality of a European country.


What are the principal documents to sign?



Buyers and sellers should realize that the purpose of legal documentation is to set down in writing the intentions of the parties concerned and the agreements between them. Preparation of legal documentation requires considerable attention and skill, for these reasons: • Anything in writing (including electronic correspondence)

can be binding, which means both seller and buyer must be careful in their correspondence with each other right from the start, even if the documents exchanged are not formal deeds.

• Anything in writing must express exactly what is intended, leaving no room for interpretation: agreements are often highly complex to state precisely in writing, especially when they concern price calculation methods.

• Anything in writing must be legally valid: if a written convention proves legally invalid, legal solutions must found to replace the initial agreement.

Below we list the main legal documents involved in the sale and purchase of wine-making estates.

Listing agreement and property description

Listing agreementThe listing agreement is the first important contract to be signed by the seller, formalizing their intention to sell the property.

It usually takes the form of a contract between the seller and a specialist intermediary.

Along similar lines, a buyer may also sign a property search agreement with an intermediary.

A listing agreement mandates an intermediary, or agent, to seek a purchaser for the property (and a property search agreement mandates an agent to seek a property).



The listing agreement includes the following details:• Identification of the property on sale• Price expected by the seller: Price of land, buildings,

equipment and brands, and details on the basis for pricing stocks. The price should be determined with the assistance of the agent, and should be realistic with respect to the current market situation. Sellers will very often tend to overestimate the value of the property with respect to actual market conditions. Under these circumstances, it might prove delicate for the agent to have the seller make a downward adjustment, in which case the property will be put on the market at too high a price, and fail to find a buyer. After a long wait, and successive price reductions, the final sale price may prove lower than that which could have been obtained by setting a more realistic price at the outset

• Limits of asset and liability guarantee• Exclusive listing clause: The listing agreement must

specify whether it is exclusive or not. (Exclusive listing agreements are commonplace for wine-making estates)

• Agreement duration and renewal conditions: The duration should be sufficient to enable the agent to find a buyer

• Agent's remuneration: The agent may be remunerated in two ways - Fixed remuneration may be set regardless of the result, covering the agent's expenses in the pursuit of their allotted task

- The main remuneration will take the form of a commission, paid on completion of the sale as a percentage of the sale price. The basis for calculating this percentage must be specified precisely (assets, stock, business value, etc.), as must the event triggering payment of the



commission (signature of final deeds, lifting of suspensive conditions, etc.)

• Resale right• Special conditions• Compulsory notes: Sale of a winemaking estate (through

sale of assets or shares in a business) must comply with the stipulations of the "Hoguet Law" on listing agreements for real-estate sales

• Agent liability exemption clauses

Property descriptionOnce the listing agreement has been signed, the agent will draw up a property description addressing potential buyers.

This document will include general information on the appellation and the vine-growing region in which the property is located. Where relevant, it might also include a rundown on the history of the estate, if considered an important aspect of the property's character.

Above all, the property description will give technical information on the vineyard.

Preparation of the property description requires great care, because all the information in it will be checked by audits carried out by the prospective buyer. Rather than embellishing the real-life situation, the aim is to present this situation in the best light.

Letter of interest and firm offerBuyers potentially interested in the property will address a letter of interest to the buyer or the agent, expressing a wish to begin negotiations and setting out conditions for proceeding with the next stage.



Letter of interestThe letter of interest marks the start of the buyer-seller relationship. In this document, the buyer will ask the seller for permission to proceed with investigations prior to confirming initial interest, and the seller will reply to the letter, granting permission.

This is an important document that must be drawn up carefully; in particular, the buyer must make sure it cannot be interpreted as a firm offer.

The seller's reply may take one of two forms:• the seller may accept the terms set out in the letter of

interest• the seller may accept certain conditions, and submit new

terms for acceptance by the prospective buyer

Once these arrangements have been settled, if the buyer is still interested they will submit a firm offer to the seller.

Alternatively, buyer and seller may proceed directly with the preliminary sale agreement on completion of the letter-of-interest stage.

Firm offerA potential buyer will submit a firm offer to the seller, confirming their intention to proceed with purchase. If the seller accepts this offer, buyer and seller decide on the details in order to proceed with signing a sale contract. Submittal of a firm offer is binding for the buyer, and acceptance of this offer is binding for the seller. The buyer's wording requires great care here, since acceptance by the seller will mark irrevocable agreement to the terms set out.



Preliminary sale agreementThe preliminary sale agreement is undoubtedly the most important document in a property transaction.

It forms a comprehensive account of the agreements binding buyer and seller.

If the sale concerns both real estate (land and buildings) and businesses, the agreement may be expressed in one document or two (one for the real estate and one for the company shares). If there are two documents, they must be specified as indissociable.

A preliminary sale agreement will include the following clauses:• Detailed description of what is being bought: company

shares and/or real estate• Price, or method for determining final price. If the price is

not determined on signature of the preliminary sale agreement, it must be determinable at this stage, or else the contract will be considered invalid.

• Payment details, and guarantees of payment installments if applicable

• Suspensive conditions, stipulated in the interest of the seller or buyer. The main suspensive conditions concern the following points: - the seller will need proof, prior to signature of the final deeds of sale, that the buyer has the funds needed to pay the agreed price, refund the current accounts and pay the duties on the transaction

- the buyer will need to obtain all relevant administrative authorizations (authorization to farm, confirmation of agricultural status, residence permit, etc.). (Some such authorizations may not be required for citizens of European Union countries.) In addition, a certificate from



INAO may be needed to confirm the land's AOC rights. And the buyer will need confirmation of property deeds for the real estate or company shares, and confirmation that the property is legally sellable (i.e. not mortgaged or concerned by local development projects, etc.)

- The transaction will need the go-ahead from SAFER (a French authority overseeing transactions concerning farming land), along with confirmation that SAFER will not be exercising its preemption right

• General and specific conditions: - pull-out by the seller - interval between the signing of the preliminary agreement and the signing of the final deeds of sale

- conditions governing the seller's move out of the house• Key dates (lifting of suspensive conditions, signing of final

deeds, transfer and use of property)• Deposit and penal clause: on the signing of the preliminary

sale agreement, the buyer is required to pay a deposit securing the purchase. This is paid into a special reserve account, usually managed by a solicitor (if the sale concerns real estate) or a lawyer. It is usually set at 5% to 10% of the real estate value

• Impact of results of expert reports on the property (lead, asbestos, termites, energy performance, drainage, etc.)

• Details on how the costs of the transaction are borne• Other clauses as applicable



Asset and liability guaranteeIf the transaction concerns company shares, the asset and liability guarantee is one of the most important transaction contracts.

With this contract, the seller undertakes to bear responsibility for the financial consequences of deeds and events that took place before the sale and which later prove to have a negative impact on the company.

The guarantee contract will usually involve negotiation, often difficult, between the seller, eager to limit their liability and the buyer, intent on the widest-reaching assurance.

Careful preparation beforehand will help the seller minimize risk exposure. Specifically, the seller will gather all relevant data for submitting to the buyer, and immediately declare all risk-prone situations in order to sidestep the need for guarantees on these matters, or to negotiate the best possible conditions for specific guarantees.

Final deeds of saleOnce the suspensive conditions specified in the preliminary sale agreement have been lifted, seller and buyer can proceed with signing the final deeds of sale.

These deeds are in principle fairly straightforward and do not give rise to further negotiations, since all the sale conditions were specified in the preliminary sale agreement, and the guarantee contract has been negotiated and appended to this agreement.



Content of asset and liability guarantee

DeclarationsThe seller makes a number of declarations on the company, its accounts, its assets, compliance with applicable regulations, etc., and guarantees this data (with reservations for specifically detailed exceptions). Discussions are then held on the scope of the declarations and on any exclusions specified in appendices to the guarantee contract or as a result of investigations carried out by the buyer.

The seller should carefully reread the guarantee contract to make sure that it contains no inaccurate declarations, and that it specifies all the required exceptions to their liability.

Extent of guarantees, and claim procedureGuarantees can cover various points:

• guarantee of declarations

• guarantee of assets

• guarantee of liabilities

• guarantee of net assets

• guarantee of clearly identified risks

• other guarantees as applicable

The guarantee contract will specify the claim procedure and the means offered to the seller by way of defense.

Guarantee limitationsThe seller's guarantee is limited in duration and in amount.

It is usually limited to periods from one to three years, except for tax and social security, for which the statutory limitation periods apply.

The guarantee ceiling often proves one of the trickiest points in the negotiation between seller and buyer. The buyer will often demand a high ceiling, based on the overall transaction price, though if the transaction includes real estate, the guarantee is already covered under the sale.

The seller, on the other hand, will want to negotiate a deductible.

The seller will also have to guarantee post-transaction solvency in the event of a claim against the liability guarantee. This will typically involve offering a bank guarantee, financial security, escrow account, etc.

It is important that the main points in the guarantee contract be negotiated as early as possible. If this is left to the final stages in the process, the transaction may ultimately fail despite agreement on the essential points of content and price.



Deed of conveyance of company ownershipThe conveyance of company ownership requires a written deed, unless the operation involves a simple sale of shares, in which case transfer orders are sufficient. Even so, the seller and buyer will sign a deed specifying the conditions under which the transaction is made.

Guarantee contractA guarantee contract, the terms of which will have been agreed on when the preliminary sale agreement was signed, will be signed at the same time as the deed of conveyance of company ownership.

Deed of real-estate saleIf the transaction includes realestate, then a deed of sale will be signed accordingly. This must take place before a solicitor.

Financial documentsThe seller and/or buyer may be required to produce financial documents in connection with the transaction:• financial guarantee submitted by the seller to the buyer to

cover undertakings under the guarantee contract• guarantee submitted by the buyer to the seller in the (highly

exceptional) instance of delayed payment

These guarantees will usually be produced by the guarantor's bank.



The above discussion of the documents involved in the sale of a wine-making property obviously makes no claims to offer a full analysis: it outlines the main contractual items required in this kind of transaction, through to completion of the sale.

A full examination would have included, for example, details on the case of sales mediated through SAFER, which require special deeds.

Our intention with this article is to draw the attention of sellers and buyers to the need to pay careful attention to the content and scope of documents they exchange and sign. This applies to all kinds of document (deeds, mail, email, etc.). Regarding deeds in particular, legal skills are required, along with specific experience in the wines and spirits sector.


What are the keys of successof your transaction?

Preparation

Anticipation

Team

Due Diligence

Price

Ability to make concessions

Never underestimate the oponent

After the dealA vineyard is a business which implies a continuous management by experienced people both on the operational level and on the financial and legal level.

The new owner shall respect the specific regulation related to the wine activity (customs, Label of origin authority, trademark, labor regulation…).


Meet PwC at Vinexpo?

The wine sector experts of PwC and PwC Société d’Avocats hosted conferences during Vinexpo Asia Pacific and Vinexpo Bordeaux, the world’s leading wine and spirits trade fair

Meet PwC at Vinexpo?


PwC Société d’Avocats Bordeaux, PwC Hong Kong and PwC Shanghai organized a conference at Vinexpo Asia Pacific on the 28th of May, 2014.

Key tips to succeed in investing in the French wine and spirits industry

Learn from our experts in the wine business: the ins and outs of a successful acquisition in France.

Meet our partners and discover the strengths and resources of an international network.

Benefit from the experience of actors from Bordeaux and share our knowledge of 30 years and of around 100 deals, on the key elements: succeed in the first steps of the acquisition, understand the process of an acquisition, plan the post-acquisition.

PwC, the wine sector specialist for 30 yearsBacked by a team of nearly 80 professionals in the wine industry throughout France, PwC and PwC Société d’Avocats have provided support to their clients for 30 years. Areas of expertise include transactions, audit and accounting, taxation in the wine industry, structuring, rural law, trademark law, as well as labor law and social security legislation. They are therefore very familiar with foreign investors.

PwC regularly publishes reviews and documents aimed at industry professionals, such as this pocket guide, the “Wines and Spirits” newsletter and a brochures in French/English/Mandarin/Russian.

To know more about us, visit our websiteswww.pwc.comwww.pwcavocats.com

To know more about wine and spirit regulations read our newsletters “Vins&Spiritueux”http://www.pwc.fr/vins-et-spiritueux.html

Contacts

Arnaud Agostini+ 33 (0)5 57 10 07 [email protected]

Paule Cathala+ 33 (0)5 57 10 07 [email protected]

Stéphanie Verschave+ 33 (0)5 57 10 07 [email protected] Société d’Avocats is member of the International Wine Law Association and can help you securise your wine and spirit investment

© 2015 PricewaterhouseCoopers. All rights reserved. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. In no event shall PwC France or any member fi rm of the PwC network be liable for any consequences of a decision made on the basis of any information contained herein.

As of 5 March 2015, Landwell & Associés has changed its name to PwC Société d’Avocats.

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Documents

Sale and purchase of vineyards - PwC · PDF fileLetter of interest and firm offer 33 ... 8 – Pocket Guide PwC The Advisor ... wine, Sale and purchase of vineyards