Constellation sells wine businesses
- Sunday 26 December 2010
Sydney-based CHAMP Private Equity will buy 80% of Constellation Wines Australia and Europe (CWAE) for A$230m under the terms of the deal, including high-profile brands such as Hardys and Kumala.
The price of the acquisition is in stark contrast to the A$1.9bn paid by Constellation for the BRL Hardy wine business in 2003.
Constellation said the transaction, due to close by the end of January 2011 subject to customary conditions, included ‘virtually all’ of its Australian, UK and South African brands, wineries, facilities and vineyards, as well as its 50% stake in UK wholesale joint venture Matthew Clark. All employees will transfer with the business.
‘The CWAE business sells quality wines from the important Australian appellation and has significant scale, but continues to be faced with challenging market conditions,’ said Rob Sands, president and CEO of Constellation Brands.
‘Therefore, the business is no longer consistent with Constellation’s strategy. We believe CHAMP has the requisite skills and motivation necessary for accelerating the success of the CWAE group.’
Constellation said it remained ‘committed’ to growing its international business and continuing to invest in and drive its premium wine portfolio, including operations in California, Canada and New Zealand.
The company would also work with CHAMP to distribute and supply each other’s products globally, Constellation added.
CHAMP managing director John Haddock said the company was ‘committed to supporting management in building a competitive and profitable business in the Australian and UK markets, and will invest to grow the business’.