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Constellation dumps value spirits brands

Published:  13 January, 2009

Constellation Brands is selling its value spirits business to New Orleans-based Sazerac for $334 million.

The deal includes Montezuma tequila and 99 Schnaaps but excludes Svedka vodka and Black Velvet Canadian Whisky.

The company said proceeds of the deal will be used to reduce Constellation's borrowings, although there is some industry speculation that the company is preparing a bid for Foster's wine division.

Rob Sands, Constellation Brands president and chief executive officer, said: "This transaction is consistent with our strategic focus on premium, higher-growth and higher-margin brands in our portfolio, and allows us to continue the process of reducing debt, generating free cash flow, creating efficiencies and increasing ROIC."