Constellation has abandoned merger talks with Australian Vintage.
The companies – which between them produce roughly one-third of Australia’s wine – began discussions about merging part of their UK and Australian businesses last autumn.
The aim was to create a stand-alone, low-cost wine producer, better able to cope with the tough market conditions for Australia, particularly in the UK.
But in a joint statement, the two companies said talks were now at an end.
‘There were a number of goals both parties were attempting to accomplish through the combination,’ said Constellation president and CEO Rob Sands, and AVL chairman Ian Ferrier.
‘Over time, it became evident that, despite both parties’ best efforts, we were not going to be successful in accomplishing all these goals.
‘Therefore, we mutually decided it was in the best interest of Constellation and AVL to discontinue our discussions and focus on our respective businesses.’
Constellation said it would now focus on achieving stronger results by increasing efficiencies, reducing costs and improving cash generation.
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Written by Richard Woodard