After six months of bids and rejections Canada’s Vincor International has finally ceded to a takeover bid by US wine giant Constellation Brands.
In a deal worth US$1.3b (£750m), Constellation is set to acquire the Canadian company, which runs Jackson-Triggs, Inniskillin, South Africa’s Kumala and New Zealand’s Kim Crawford, as well as the US$220m (£127m) debt it has accrued.
Vincor’s board of directors is reported to have approved the deal yesterday.
Although the takeover is still subject to a shareholder vote on 1 June as well as other takeover regulations and approvals, it is understood that the deal will be completed by mid-June.
The $1.3b price tag is only slightly more than was first proposed by Constellation in September last year. Back then, the US wine giant offered $1.2b for Vincor – a deal swiftly rejected by the Canadian firm’s board of directors.
Since then, Constellation has doggedly pursued the Canadian company with several takeover offers. Until now all bids had been refused by Vincor’s board on the grounds that the company was worth more than it had been offered.
Although Constellation CEO Richard Sands made a ‘best and final offer’ of CA$33 (£16) per share in November 2005, the deal accepted by Vincor’s board sees Constellation paying CA$36.50 (£18) per share.
‘Discussions and diligence led the Constellation and Vincor management teams and boards of directors to the conclusion that this is a mutually beneficial transaction,’ said Sands.
Sands’ counterpart at Vincor, Donald Triggs, said he was pleased with the deal, saying it ‘fully recognises our strong brands’.
Constellation is the world’s biggest wine company. Its portfolio includes such brands as Mondavi, Paul Masson, Banrock Station, Hardy’s, Stowells and Nobilo.
Written by Oliver Styles
