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Constellation sells wine business to Canadian pension plan

DBR Staff Writer Published 20 December 2016

Constellation Brands' sale of its Canadian wine business to Ontario Teachers' Pension Plan for C$1.03bn (about $786m) has been completed.

The transaction included wine brands like Jackson-Triggs and Inniskillin, wineries, vineyards, facilities, offices, alongside Wine Rack retail stores.

In this regard, Constellation Brands received nearly C$765m ($570.5m) in cash which represented net of repayment of outstanding debt after post-closing adjustments.

The New York State based beverage alcohol company said the sale is in line with its focus on driving higher growth, higher-margin business activities, and its capital allocation strategy,

It was also said to be in line with Constellation Brands’ commitment in giving value to shareholders via cash dividends and repurchasing of shares along with select and value-creating acquisitions by sustaining operations at a targeted leverage ratio.

Despite the divestiture, Constellation Brands said that its ownership of Black Velvet Whisky and the relating whisky manufacturing plant located in Lethbridge in Alberta province remains intact under its ownership.

The sale of the Canadian wine business to Canada’s largest single-profession pension plan was agreed by Constellation Brands in mid October.

Constellation Brand followed its Canadian wine divestiture announcement with the acquisition of the Obregon Brewery from Anheuser-Busch InBev’s subsidiary Grupo Modelo for $600m.

In other transactions, the alcohol maker agreed to acquire High West Distillery based in Utah for nearly $160m in October.

In the same month, it followed up with another acquisition of $120m to buy Charles Smith Wines collection of five wines that include Velvet Devil Merlot, Kung Fu Girl Riesling, Boom Boom! Syrah, Chateau Smith Cabernet Sauvignon and Eve Chardonnay.

Headquartered in Victor, Constellation Brands is a global producer and distributor of beer, wine and spirits having operations in not only the US but also in Canada, Mexico, Italy and New Zealand.

Image: Constellation Brands headquarters in New York. Photo: courtesy of DanielPenfield and Wikipedia.