Constellation sells wine brands for US$209m

27 August, 2008
Page 6 
Constellation has moved to slim down its wine portfolio by selling off brands to Eight Estates Fine Wines for US$209 million.

The cash-only deal represents around 1 million cases of wine, and Constellation will use the proceeds to reduce debts.

The Sonoma-based Eight Estates will gain several brands, including wines acquired from Fortune as recently as December 2007.

Constellation chief executive Rob Sands said: " The sale of these assets will aid in streamlining Constellation's US wine portfolio by eliminating brand duplication and excess production capacity."

The group predicted it would still report a pre-tax loss of US$23 million for its full year.

The brands sold are, in California: Geyser Peak, Buena Vista, Gary Farrell, Atlas Peak and XYZin, which were acquired from Fortune Brands in December 2007 ; and - originally acquired in 2001 from Corus Brands - Columbia Winery and Covey Run (including Sunnyside winery) in Washington state, and Ste Chapelle in Idaho.