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Constellation Brands to buy Casa Noble Tequila to grow spirits offering

Published:  18 August, 2014

Constellation Brands announced last week its plans to acquire the Casa Noble Holdings tequila brands

Constellation Brands announced last week its plans to acquire the Casa Noble Holdings tequila brands.

Purchase terms were not disclosed, but the acquisition is expected to close next month.

Constellation does not currently have any tequila brands within its spirits portfolio, which is significantly smaller compared to other drinks giants like Diageo or Pernod Ricard. Currently Constellation only has Svedka Vodka, Black Velvet Canadian Whisky and Paul Masson Grande Amber Brandy as part of its spirits offering.

Casa Noble is super-premium tequila made from organic blue agave in Jalisco, Mexico. Casa Noble Holdings include Casa Noble Crystal, Reposado and Anejo tequilas in addition to several ultra-high-end limited production tequilas it produces.

Rob Sands, chief executive of Constellation Brands, said: "I'm excited for the opportunity to integrate Casa Noble tequila into our existing portfolio. As the first super premium spirits brand we'll add to our portfolio, Casa Noble is a natural fit. It complements our successful Mexican beer brands and we intend to leverage our existing strong routes-to-market, as well as our marketing expertise and deep knowledge of the Hispanic consumer."

Casa Noble was founded by David Ravandi, Carlos Hernandez and Jose Hermoosillo, with famed guitarist Carlos Santana as an equity investor.

Constellation Brands focuses primarily on the US market and tequila grew 10% in the 2013 according to the Distilled Spirits Council of the United States (DISCUS).  Super premium tequila has seen 481.8% growth since 2002- 2013 in the USA, over double any other category in the tequila market. Revenue from super premium tequila also grew by 455.9% during the same time according to DISCUS.

Constellation has had major success with recent acquisitions, particularly with last year's acquisition of Grupo Modelo's US beer business from Anheuser-Busch InBev for US$4.75 billion.  The acquisition propelled Constellation to be one of the top performing stocks on the S&P 500.

Last month the stock closed on a 52 week high of $91.15 per share after the announcement that Constellation was again raising its forecasted outlook for 2015 on 3 July.