An acquisition or cross-border merger is a business practice to get a firm foothold in the market. Divestment, on the other hand, provides a business opportunity to get rid of recurring and future business losses due to a number of reasons like competitors’ strategies and fluctuating market conditions. Acquisition, divestment and cross-border merger started in the global wine industry in a big way, and the industry is yet to settle after a storm of mergers and acquisitions. Diageo is no exception to the trend, starting with its acquisition of Chalone – in the background of other wine market acquisitions of BRL Hardy by Constellation Brands that started in 2003, consolidating the acquisition environment further till 2005 with the acquiring of Barefoot Cellars by E amp. J Gallo and Robert Mondavi merging into Constellation Brands’ fine wine division (Diageo Plc, 2005). Diageo also sold part of its stake in General Mills in the year 2004 to fund a buyback of its own shares. Diageo had 20% stake in General Mills. About 79 million shares of General Mills were acquired by Diageo when it bought Pillsbury company from Diageo in 2001. Coming back to the acquisition of Chalone Wine Group, gained in February 2005, it resulted in the addition of a number of premium Californian wines to Diageo’s portfolio. This acquisition enhanced Diageo’s profile in the wine segment. The reason behind wine market consolidation has been to tap the emerging opportunities in BRIC nations – namely Brazil, Russia, India and China. According to Global Market Information Database, March 2005, the growth of red wine market in Brazil would be around 14% because of the rise in wine drinking due to rise in domestic production as well as health reasons.