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Constellation Reportedly Eyeing Ste. Michelle

May 18, 2017

Ever-acquisitive Constellation Brands may be lining up its next target. Forbes reports that Constellation may be eyeing a potential purchase of Washington’s leading winemaker, Ste. Michelle Wine Estates (SMWE). The speculation follows a recently released Wells Fargo report highlighting the fact that SMWE’s business only accounts for around 3% of sales and 2% of profits for brand owner Altria, whose core business is in tobacco. Some believe that Altria will eventually offload Ste. Michelle at a price estimated to fall between $3 and $4 billion.

With revenues totaling $7.3 billion in its fiscal year through February, Constellation is considered a prime bidder for the Ste. Michelle business. The upstate New York-based company has been one of the most acquisitive players in the drinks industry over the past few years, with recent purchases including craft brewer Ballast Point, Utah distiller High West, Joe Wagner’s Meiomi wine brand, Washington-based Charles Smith Wines and California’s The Prisoner Wine Company. SMWE, whose core brands include Chateau Ste. Michelle, 14 Hands and Columbia Crest, among others, posted a net revenue rise of 7.8% to $746 million in 2016. —Christina Jelski

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