Constellation sell-off excludes NZ
The US wine giant is selling most of its Australian, UK and South African businesses.
US-based Constellation Brands, the world's largest winemaker, is retaining its New Zealand operation while selling off those in Australia, the UK and South Africa.
Constellation, which owns the Selaks, Kim Crawford and Nobilo brands in New Zealand, says the sale will enable the company to focus on its most profitable brands and shore up its balance sheet.
Australia's CHAMP Private Equity, a private equity fund based in Sydney, will pay $A230 million for 80% of Constellation's businesses in the three countries.
Constellation says it will retain a 20% interest in the businesses, whose brands include Hardys, Leasingham and Fox Ridge in Australia, Fish Hoek in South Africa and Stowells in the UK. The South American and continental European brands will be retained along with New Zealand.
CHAMP says the deal comes near the cyclical low for the wine industry and it sees strong upside for the Constellation business.
"At CHAMP we have dealt with these sorts of situations previously when most people are heading for the exit door and sometimes that's the wrong door," CHAMP executive chairman Bill Ferris told Reuters. "It is somewhere toward a cyclical low in this global wine sector, and the timing therefore may be sensible.”
The sale comes as two other global winemakers are involved in restructuring their businesses.
US-based Brown-Forman has said it may sell some of its California wines, while Australia's Foster's Group, the second-biggest wine maker after Constellation, is splitting its beer and wine units. This move is expected to attract offers in the new year.
Nevil Gibson
Thu, 30 Dec 2011
Thu, 30 Dec 2011
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Constellation sell-off excludes NZ
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