As Constellation Brands and BRL Hardy inch towards consummation of their merger, industry insiders consider it 'highly unlikely' any other players will enter a bid for the Australian company.
Citing the unstable global economic climate, one senior source told decanter.com, ‘It is highly unlikely there will be another bid. You have to be sure of your returns and with wine there is not that assurance.’
Other industry watchers said the current relationship between Hardys, Australia’s second-largest wine company, and US Constellation Brands, who already have a joint venture in the form of distribution company Pacific Wine Partners, would be too complex to unravel.
BRL Hardy is in talks with Constellation Brands to merge to create the world’s largest wine company. If the deal is finalised, the new company will be worth around US$3.4bn. Constellation chief executive and chairman Richard Sands is due at BRL Hardy’s headquarters in Adelaide tomorrow.
The news has given rise to speculation that other big names – Diageo, France’s Pernod Ricard, or Foster’s – may throw their hats into the ring. London’s Evening Standard newspaper quotes analyst J P Morgan as saying in a research note, ‘There is a realistic chance of a second bidder emerging once the agreement is announced.’
Allied Domecq has unofficially told analysts it will not launch a bid, the Standard reports.
None of the companies concerned has any comment.
Written by Adam Lechmere16 January 2003