Constellation Brands, the world’s leading premium wine company, has agreed to sell its Australian and UK business – Constellation Wines Australia and Europe – to Champ Private Equity of Sydney for A$290m (Eur220m). Constellation will retain a 20% interest in the business and receive cash proceeds of about $230million.
The transaction, which is expected to close by the end of January 2011, includes virtually all Constellation’s Australian, UK, and South African brands, wineries, facilities, vineyards, and the group’s 50% interest in Matthew Clark, the UK wholesale joint venture.
“During the last two years, Constellation has implemented a strategy focused on driving profitable organic growth through premiumising its world class brand portfolio and improving margins, return on invested capital and free cash flow,” says Rob Sands, president and chief executive of Constellation Brands. “The CWAE business sells quality wines from the important Australian appellation and has significant scale, but continues to be faced with challenging market conditions. Therefore, the business is no longer consistent with Constellation’s strategy.”