Constellation wine sell-off rumours swirl

Rumours abound that US drinks giant Constellation Brands is to divest itself of its Canadian business with questions raised about the future of its stake in Accolade.

It has for some time that the company was planning to sell off its US$1 billion ‘Vincor’ Canadian business, which includes Inniskillin, while reports this week suggest it has already begun soliciting offers.

Constellation’s chief executive, Robert Sands, did say earlier this year he was considering the potential of an initial public offering (IPO) for the Canadian business it acquired in 2006.

This idea was quickly shelved however when it became clear that there were eager buyers waiting in the wings.

So far however, Constellation has refused to comment on the rumoured sale nor has it addressed speculation about the future of its 20% stake in the Australian group, Accolade Wines.

Constellation bought Accolade – or as it was then BRL Hardy – in 2003 for US$1.9bn. In 2011 an 80% share was sold to Champ Equity for US$300m when Australian wine exports were struggling thanks to the strength of its currency, which was almost at parity with the US dollar.

Accolade itself is to be listed in 2017 although with investors apparently already circling, the proposed IPO listing may be turned into a trade sale instead. The Australian recently reported that Chinese baijiu maker, Kweichow Moutai, is among the potential pool.