Constellation Brands, the US-based drinks group, has confirmed that it is in talks with BRL Hardy, the largest wine producer in Australia, over a possible merger or acquisition.
The two companies already work together in the Pacific Wine Partners joint venture, through which Constellation markets Hardy's wines in the US, and the success of this partnership has clearly prompted the firms to consider closer ties.
Constellation chairman and CEO Richard Sands said: "Discussions with BRL Hardy regarding a possible transaction are taking place, but we have not yet reached agreement on a structure or transaction value."
He continued: "Bringing together Constellation and BRL Hardy would create the world's largest wine business, with leading positions in the world's 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 the US, Australia, New Zealand and Chile.
"It would accelerate our overall growth rates, adding to Constellation's track record of generating excellent results and delivering shareholder value. While our discussions are at an advanced stage and the companies have signed non-solicitation and break fee agreements, there can be no assurances that any transaction will be agreed upon."
Constellation Brands claims to be one of the world's leading producers and marketers of beverage alcohol brands with a broad portfolio of wines, spirits and imported beers. Hardy, on the other hand, is focused solely on wine production, owning vineyards not only in Australia but also in New Zealand, France and the US. Its key brands include Banrock Station and Hardys.