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Constellation shares up on $1 billion Ballast Point bid

Constellation shares up on $1 billion Ballast Point bid

Constellation Brands, which owns Corona and Robert Mondavi wines, is seeing shares rise after the announcement that it is acquiring San Diego-based craft brewery Ballast Point for $1 billion. Shares in Constellation (STZ) were up 1.6% to $137.52. The stock’s 52-week high is $138.88.

Constellation, headquartered in Victor, N.Y., owns the numerous beer and wine brands including Corona Extra and Corona Light, Modelo Especial, Negra Modelo and Pacifico, as well as Clos du Bois, Franciscan Estate and Ruffino. Its premium spirits brands include SVEDKA Vodka and Black Velvet Canadian Whisky. Ballast Point, which sells beer in more than 30 states, is expected to sell nearly 4 million cases of beer this year, double its output last year, with sales of about $115 million. The transaction will be financed with cash and debt, Constellation says, and is expected to close by the end this year.

“Along with imports, craft beer is a key driver of growth and premiumization within the beer industry, with craft doubling its share of the U.S. beer market in the last five years,” said Constellation CEO Rob Sands in a statement. “Ballast Point has certainly been a key driver of that growth. Their business philosophy and entrepreneurial spirit perfectly align with our culture and we look forward to strengthening our position in the high-end beer segment with what is arguably the most premium major brand in the entire craft beer business.”

“We started this business nearly 20 years ago with a vision to produce great beer that consumers love and to do it the right way,” said Jack White, who founded Ballast Point in 1996. “To achieve that vision, we needed to find the right partner. The team at Constellation shares our values, entrepreneurial spirit and passion for beer, and has a proven track record of helping successful premium brands reach the next level of growth and scale.” An award-winning brewery, Ballast Point ranked as the 31st largest small and independent brewer in 2014, according to the Brewers Association’s list released in March 2015.