The sale of Constellation Brands Australian operations is imminent, just-drinks understands

The sale of Constellation Brands' Australian operations is imminent, just-drinks understands

Press speculation out of Australia last week has suggested that Constellation Brands is approaching a deal to sell its Australian and UK operations.

Local reports have suggested that US-based private equity group Cerberus Capital Management is set to make a move for Constellation's wine business in Australia and the UK. When contacted by just-drinks today (20 December), however, a spokesperson for Constellation said that the company would not be commenting on the claims.

Constellation, the world's biggest wine company, has had a tough time in both Australia and Europe in the last 18 months. As the wine glut in Australia has shaken the industry as a whole, Constellation has been buffeted in the UK, its main European market, as duty pressures and the power of the major retailers has made for a challenging time of late. Back in June last year, Troy Christensen, the president of Constellation Europe, also assumed responsibility for Constellation Wines Australia followed two months later by news of a realignment of the two divisions.

While no-one at Constellation would comment on the rumours, sources close to the situation have told just-drinks that it is more a case of when, and not if, a deal for the unit will take place. Although it is not yet clear what size such a transaction would be, the source said the purchase is imminent.

Cerberus, the company linked to purported purchase, hit the drinks spotlight in the Australian wine industry in September, when Foster's Group, which is demerging its beer and wine operations, said it had rejected a AUD2.7bn (US$2.5bn) takeover bid for its Treasury Wine Estates unit. Whilst Foster's did not name the private equity group, Cerberus was rumoured to be one of the interested parties.

In August, Constellation said that it will de-list from the Australian Stock Exchange this coming February. Its shares on the ASX were suspended last month due to the securities being thinly traded in Australia.