Constellation Brands has pulled out of the race to acquire Allied Domecq. The move leaves the door wide open for rivals Pernod Ricard, Fortune Brands and Diageo to carve up the UK company.

In a statement released early this morning (GMT) Constellation chairman and CEO Richard Sands said: "Constellation approached this opportunity in a disciplined strategic and financial manner and does not believe that the economics justify an offer. Our basic premise is always that a transaction must create value for our stakeholders. Simply put, careful consideration and evaluation of the details following due diligence did not identify sufficient value for submitting an offer."

Constellation Brands had been heading a consortium that also included Brown-Forman Corporation, Lion Capital and The Blackstone Group.

Sands continued: "Constellation greatly appreciates the strong support we have received from our shareholders and consortium partners throughout this process. We continue to believe that there are additional opportunities to complement growth of our base business with strategic acquisitions in our industry, and we will remain a determined and disciplined buyer. As the largest wine company in the world, and the largest multi-category supplier of beverage alcohol in the US, Constellation looks toward building upon its outstanding track record of delivering true growth and value to our shareholders."

Brown-Forman chairman and chief executive officer, Owsley Brown II voiced an apparent disappointment at the decision. He said: "We were excited about the prospect of owning some of Allied Domecq's premium brands and are disappointed that the consortium is unable to proceed. We are very cognizant, however, of the great efforts put forth by each of the consortium partners and are respectful of the decision reached by Constellation Brands."

As late as last week, Constellation had indicated it was still hoping to work towards making an offer for Allied Domecq. The consortium had been given a 29 June deadline by UK regulatory authorities to make up its mind.

However, many observers believed the Constellation-led bid was dealt a fatal blow last week when Diageo signed an agreement with Pernod Ricard not to enter discussions with third parties about any counter-bids for Allied.

In return, Pernod agreed to sell Diageo its Irish whiskey brand, Bushmills, for GBP200m and gave the UK drinks giant an option to buy Allied's Montana wine business for GBP320m if Pernod's bid is a success.