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ACCC Receives Merger Proposal From Wine Groups

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US wine and spirits maker Constellation Brands Inc and Sydney-based wine company Australian Vintage Ltd have lodged a submission with the Australian Competition and Consumer Commission (ACCC) for clearance on their proposed merger.

The two parties have been in discussions over combining part of Constellation’s Australian and UK wine operations with Australian Vintage in exchange for a non-controlling, 50 per cent equity stake in the combined entity.

In a statement to the market on Monday, Australian Vintage said that the submission has been made ahead of any binding deal between the companies.

Constellation, owner of Robert Mondavi wines, flagged its intention to sell or merge a part of its Australian and UK wine operations in November.

The US company has been struggling to sell off brands for at least a year as it battles a wine glut and, like its biggest rival Australia’s Foster’s Group Ltd, has had a tough time finding any buyers.

Constellation chief executive Rob Sands said in November that the proposed deal would help the companies better tackle the challenges currently facing the wine industry.

The synergies created from the merged entity would better position both companies for success in the current operating environment, the company said at the time.

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Friday, December 15, 4:16 am

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