Constellation Brands Close to Sale of its Canadian Wine Division

Constellation Brands Inc. is close to an agreement to sell its Canadian wine business to Ontario Teachers' Pension Plan in a deal valued at about 1 billion Canadian dollars ($760 million), according to people familiar with the deal.

The acquisition could be announced as early as Monday morning, these people said.

Constellation, based in Victor, N.Y., announced in April it planned to explore an initial public offering for its Canadian wine business but put the business up for sale after receiving overtures from a handful of Canadian wineries and Ontario Teachers', the people said.

The planned sale highlights Constellation's sharpened focus on premium spirits, beer and wine. The company has strung together a series of deals for higher-priced alcohol products over the past year, buying craft brewer Ballast Point, wine-maker Prisoner Wine Co. and whiskey-maker High West Distillery.

Constellation is jettisoning its Canadian unit, which includes such wine labels as Jackson-Triggs and Sumac Ridge, 10 years after it acquired Vincor International Inc. for C$1.27 billion. Constellation is keeping Vincor's international wine labels, including Australia's Kim Crawford, that came with the 2006 purchase.

Publicly traded Constellation began as a bulk wine purveyor in the 1940s and grew into one of the U.S.'s largest alcohol companies by acquiring well-known brands like Robert Mondavi and Clos du Bois. Much of its sales now comes from Mexican beers like Corona Extra and Modelo Especial, which it bought for the U.S. market in 2013.

Ontario Teachers' was a former Vincor investor and has long regarded the wine business as a growth industry. The pension fund is one of Canada's largest and the planned acquisition would expand its portfolio of consumer-goods companies.

Write to Jacquie McNish at [e-mail] and Tripp Mickle at [e-mail]

(END) Dow Jones Newswires

October 16, 2016 21:35 ET (01:35 GMT)

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