United States: Crown Imports President denies sale of the venture

Corona beer distributor Crown Imports, a joint venture between Constellation Brands Inc and Grupo Modelo, is not for sale, Reuters cited Crown’s president on September, 16.

Crown Imports President Bill Hackett said Crown was not for sale in a presentation at a meeting of beer wholesalers on September, 15.

Mr Hackett quoted Constellation Chief Executive Robert Sands as saying he has never expressed interest in selling Constellation's half of Crown, or in ending its relationship with Modelo, the Mexican brewer of Corona.

This was confirmed by a Constellation spokesman on September, 16.

Following an August meeting with Sands, Deutsche Bank analyst Marc Greenberg wrote in a note on Sept. 1 that Sands had expressed interest in terminating the joint venture and indicated that the franchise could be "severable" sooner than the contract expires, without harming the rest of the business.

"He indicated that management would always be willing to entertain offers it considered attractive from an economic value standpoint," Greenberg wrote.

Greenberg was not available to comment on September, 16.

While some on Wall Street have long speculated that Modelo would like to acquire the venture outright once the contract expires, that possibility has been called into question by consolidation on a larger scale.

Half-owned by Anheuser-Busch, Modelo has yet to bless the InBev deal, but if it ended up in InBev's portfolio, regulatory concerns could hinder a bid for Crown, which distributes top-selling import Corona, as well as Modelo, Tsingtao and St. Pauli Girl in the United States.

Constellation shares were up 14 cents or 0.6 percent at $22.60 on the New York Stock Exchange in Sept. 16 afternoon trading.