US drinks group Constellation Brands has confirmed it is in talks with
Australian wine giant BRL Hardy regarding a merger or acquisition.
Discussions are at an “advanced stage” and both companies have signed non-solicitation and break fee agreements, but no agreement has been reached on the transaction’s structure or value, Constellation’s CEO
Richard Sands said in a statement.
The two companies already operate Pacific Wine Partners, a joint venture to distribute BRL Hardy’s wines in the US. The venture added $4m to Constellation’s bottom line in the third quarter as demand increased 40% for Hardy’s Banrock Station label and 70% for Blackstone.
Constellation chairman and CEO Richard Sands said: “Discussions with BRL Hardy regarding a possible transaction are taking place, but we have not yet reached agreement on a structure or transaction value.”
Sands continued: “Bringing together Constellation and BRL Hardy would create the world’s largest wine business, with leading positions in the world’s key wine markets. We would have a broader and more powerful wine portfolio to market worldwide, encompassing all price points and emphasising the fastest growing category – ‘New World’ wines from the US, Australia, New Zealand and Chile. It would accelerate our overall growth rates, adding to Constellation’s track record of generating excellent results and delivering shareholder value.
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By GlobalData“While our discussions are at an advanced stage and the companies have signed non-solicitation and break fee agreements, there can be no assurances that any transaction will be agreed upon.”
