October 17, 2016 / 12:21 PM / in 9 months

Constellation to sell Canada wine business for C$1.03 billion

2 Min Read

(Reuters) - Constellation Brands Inc (STZ.N) said on Monday it would sell its Canadian wine business to Ontario Teachers' Pension Plan for about C$1.03 billion ($775 million).

Shares of the company, which also said it would buy five super and ultra-premium wines from Charles Smith Wines LLC, were up 2 percent at $173 in premarket trading, on pace to open at a record high.

The deals are part of Constellation's strategy to focus on its premium beer and wine business in the United States, where it has made a number of acquisitions including Sculpin IPA-owner Ballast Point Brewing & Spirits.

Constellation said the sale, which includes the Jackson-Triggs and Inniskillin wine brands, is expected to close by the end of 2016.

The company said it would continue to own the Black Velvet Whisky and related production plant in Lethbridge, Alberta.

The Wall Street Journal first reported the deal on Monday.

Constellation got the bulk of its Canadian wine assets through its C$1.23 billion acquisition of Vincor International Inc in 2006.

Seven of the company's wine brands are among the top 20 in the Canadian market, Ontario Teachers' said on Monday.

Constellation said in April it was considering taking part of its Canadian wine business public.

"We seized the opportunity to sell the entire business in a value-enhancing transaction when it presented itself," Chief Executive Rob Sands said in a statement.

Constellation said it would acquire the wines from Charles Smith Wines LLC for about $120 million.

Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta

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