(Yicai Global) Dec. 12 -- The Yantai Changyu Pioneer Wine Co. [SHE:000869; 200869] plans to buy a combined 80 percent stake in Australian wine company Kilikanoon Estate Pty Ltd. from 11 private persons for AUD21 million (USD15.75 million) to complement the company's existing products and introduce the target's to the Chinese market.

A company board meeting approved the acquisition yesterday, the firm said last night.

Upon completion of the deal, the target company's key executives, such as major shareholders, general manager and chief winemaker, will retain their stake in the company for five years to jointly partake of the fruits of future growth and ensure the stability of operations and management, per the acquisition contract the parties signed, the announcement stated.

The payback period for the investment will be fifteen years if the sales income of the target company's products in China are left out of account, but will fall to six to seven if this sales income is considered.

The target company is based in the Clare Valley, a famous wine region in South Australia where grape varieties are diverse and abundant, and whose characteristics and taste conform to the demands of China's mainstream wine consumers for high quality.

A top Australian winery, Kilikanoon Estate won the James Halliday Best Winery award in 2013, the announcement added.

Sun Liqiang, Changyu's chairman, will resign as chairman of the board, but will remain as a company director, it also announced the same day.

Sun has been Changyu's chairman since 1997, public information shows.

China's wine industry leader Changyu has suffered from lackluster performance in recent years, with its net profit slipping from CNY1.9 billion (USD285 million) in 2011 to CNY982 million last year. Further, the wine company failed to gain substantial results from its large overseas investments.