Diageo has agreed in principle to acquire the Schenley Distillery and Bottling operation in Canada from Constellation Spirits. The purchase price was not disclosed.

The transaction is expected to complete in June and is subject to the completion of satisfactory due diligence and board approval by both organisations, Diageo confirmed this morning (21 May).

Located in Valleyfield, Quebec, the facility has become available to Diageo with the decision of Constellation Spirits to consolidate Canadian production needs in their Lethbridge, Alberta facility.

The facility has been a long-term supplier to Diageo of both distillate and packaging services. As part of the agreement, Diageo will assume the employees from Constellation Spirits.

"The Schenley Distillery and Bottling plant in Valleyfield, Quebec has been an integral part of our supply chain, providing high quality distillation and bottling services for a variety of Diageo brands," said John Council, president, Diageo Americas supply.

"After reviewing a number of options, we have determined that the possibility to purchase this facility was a great opportunity and the best way forward to support the continuing growth of our brands. The facility has dedicated and skilled employees, a welcoming community and business environment and we look forward to being present and operating there."