BRL HARDY AND CONSTELLATION BRANDS IN POSSIBLE MERGER

Constellation Brands, the US-based drinks company and parent of Matthew Clark, is in talks regarding an acquisition or merger with Australia's largest wine producer, BRL Hardy - a move that could create the largest wine company in the world. Constellation chairman and CEO Richard Sands said in a statement that discussions were at an advanced stage', but that there were no assurances' that a transaction could be agreed upon. The two companies have forged close links in the past and co-own the $100-million US-based wine producer and distributor Pacific Wine Partners. BRL Hardy, with a market capitalisation of 500 million, is about one third the size of Constellation. Sands added: Bringing together Constellation and BRL Hardy would create the world's largest wine business, with leading positions in the key wine markets. We would have a broader and more powerful wine portfolio to market worldwide, encompassing all price points and emphasising the fastest-growing category: New World wines from Australia, New Zealand, the US and Chile.' Brands in Constellation's portfolio include a number of US wines, such as Simi and Ravenswood, while Stowells of Chelsea, the UK's biggest-selling wine brand, falls under the Constellation Brands umbrella through its offshoot Matthew Clark. BRL Hardy owns vineyards in most of Australia's wine regions, as well as New Zealand, France and the US. Its key brands include Banrock Station, La Baume and a large portfolio of regional super- and ultra-premium wine brands spread across the major wine regions of Australia, New Zealand and the US. Stephen Millar, BRL Hardy's managing director, said: The wine operations of both companies have achieved outstanding growth over the last decade. If a deal is reached, the combined BRL Hardy and Constellation wine operations will create the world's largest wine business, with leadership positions in the world's key markets, and annual wine sales of around A$3 billion.' Simon Russell, director of communications at Matthew Clark, said: Constellation has a very successful track record of acquisitions, based on a clear strategy that it sticks to. That strategy is that any prospective deal offers great potential for growth; that it would be a good match for our existing business, and that it is accretive to Constellation's share value in the year of the transaction. Bringing Constellation and BRL Hardy together is potentially very exciting.'