Genesee Brewing Co., has canceled an agreement to sell the fifth-largest US brewery to Platinum Holdings, owner of City Brewing Co. in La Crosse, Wis.

Tom Hubbard, chief executive said "we believe that the interests of our shareholders will be better served by terminating the agreement."

Genesee stated that the reason for the collapsed deal was that unspecified terms were not met. It is now exploring alternative strategies including a management-led buyout.

Genesee produces 1.6 million barrels of beer and ale a year and had revenues of $103.3 million in the 1998-99 fiscal year. The buyout was to have been completed by mid-March. Under the deal, Genesee Brewing would operate under a new name with most of its 470 workers retaining their jobs.

Genesee said it has saved about $8 million after a turnaround program it started last summer. In December, it reintroduced its 12 Horse Ale brand and is aiming to reinvigorate its Genesee line with promotional campaigns during this summer.