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Constellation Brands to Acquire Australia's Largest Wine Producer BRL Hardy; Creates World's Largest Wine Company with Over $1.7 Billion in Wine Sales.

Article Excerpt
Constellation Brands, Inc. today announced it has reached an agreement to acquire BRL Hardy Limited , Australia's largest wine producer. The transaction will accelerate Constellation's overall growth, increase its overall sales to $3.2 billion annually and, in combination with Constellation's existing wine businesses, make it the world's largest wine company at $1.7 billion in wine sales.

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Constellation has offered shareholders of BRL Hardy A$10.50 per share, valuing BRL Hardy's total shares at approximately $1.1 billion. Including the assumption of around $325 million in net debt, the total purchase price is valued at approximately $1.4 billion. The transaction will be financed through a combination of cash and Constellation stock. BRL Hardy shareholders will be offered a choice of all cash, all stock or a combination thereof. The transaction is subject to approval of BRL Hardy's shareholders and customary closing conditions, and is expected to close in early April 2003.

In making the announcement, Constellation Chairman and CEO Richard Sands said, "This is a tremendous addition to Constellation's portfolio. By combining two fast growing and high performing companies, we fulfill Constellation's strategic objectives to accelerate its growth rates, broaden its product portfolio and geographic reach and increase its competitive advantage. BRL Hardy has generated dynamic results over the past five years, producing an average of 21% sales growth and 26% EBIT growth annually during that period." Mr. Sands added, "Together, we will create the world's largest wine company, with powerful market positions in the U.S., U.K. and Australia and a strong platform to grow our export business in other key markets. Combined with continued investment in our fast growing U.S. imported beer and U.K. wholesale businesses, Constellation will be a faster growing company."

Discussing the combined companies' prospects, Mr. Sands said, "First and foremost we look forward to having BRL Hardy's capable management and employees join Constellation. We have complementary businesses that share a common growth orientation and operating philosophy, which will be truly enhanced when brought together. We will have a powerful wine brand portfolio, encompassing all price points and emphasizing hot 'New World' wines. The strong growth prospects for wine worldwide -- particularly those from Australia, U.S., New Zealand, and Chile --...