Winemaker Constellation Brands, Inc. (STZ, CBR.ASX) said Sunday that it is in talks to merge a portion of its Australian and U.K. businesses with Sydney headquartered Australian Vintage Ltd. (AUVGF.PK) to combat difficult trading conditions.
The U.S. based Constellation, which has more than 100 total brands in its portfolio, said the potential combination would create synergies between the two companies, better positioning the new entity for success in the current challenging operating environment.
Constellation said the talks are continuing and a number of material issues need to be addressed before a deal can be finalized. As a result, the discussions are preliminary and may not lead to a transaction.
If a transaction results, the combined companies would operate as a stand alone wine company, which would be listed on the Australian Stock Exchange with Constellation holding a substantial, but non-controlling, interest in the combined entity.
"The Australian wine industry is facing unprecedented negative operating conditions," said Rob Sands, president and chief executive officer, Constellation Brands. "This combination would create a more competitive entity better positioned to deal with the current environment."
"Constellation Brands remains focused on achieving stronger, more sustainable results by tightening the focus of the portfolio, optimizing assets and finding synergies across all aspects of the business," Sands said.
STZ declined $0.38 or 2.35% and closed Friday's regular trading at $15.82.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.