Constellation Brands Continues Merger Talks With Australian Vintage
By James Wells
Constellation Brands president and CEO Rob Sands is continuing discussions with Australian Vintage regarding a potential merger between the two companies.
In an announcement made to the New York Stock Exchange, Sands claimed the company is “pursuing a number of opportunities with various parties to improve the prospects of its Australian and U.K. businesses”.
"These include opportunities which may result in the sale of certain assets and a possible combination of a portion of Constellation’s Australian and UK wine operations with Australian Vintage Ltd. (AVL) in exchange for a substantial, but non-controlling, interest in the combined entity,” the statement said.
“This potential combination would create synergies between the two companies, better positioning the new entity for success in the current challenging operating environment. If a transaction results, the combined companies would operate as a standalone wine company, which would be listed on the Australian Stock Exchange (ASX),” the statement said.
“The Australian wine industry is facing unprecedented negative operating conditions,” said Rob Sands, president and chief executive officer, Constellation Brands. “This combination would create a more competitive entity better positioned to deal with the current environment.”
Sands claimed the discussions between Constellation Brands and AVL are ongoing, and there are a number of material issues which need to be addressed before a deal can be finalised. As a result, the discussions are preliminary and may not lead to such a transaction.
“Constellation Brands remains focused on achieving stronger, more sustainable results by tightening the focus of the portfolio, optimising assets and finding synergies across all aspects of the business,” Sands said.