Constellation sells Black Velvet whisky to Heaven Hill
US drinks firm Constellation Brands has agreed to sell its Black Velvet Canadian whisky to Bourbon giant Heaven Hill Brands for US$266 million.
Constellation Brands, owner of Svedka vodka and Casa Noble Tequila, has signed an agreement with Kentucky-based Heaven Hill for the sale of Black Velvet and its production facility in Lethbridge, Alberta. The transaction also includes a division of Canadian whisky brands produced at the site.
The deal comes four months after Constellation offloaded around 30 wine and spirits brands to E&J Gallo Winery for US$1.7 billion.
Constellation said net sales from Black Velvet and the other brands included in the latest transaction made US$67m in its 2019 fiscal year. The deal – which is subject to regulatory approval – is expected to close during the second half of 2019.
“We are relentlessly focused on the consumer and building a portfolio of brands consumers love today, while pushing beyond to meet their evolving needs well into the future,” said Bill Newlands, Constellation Brands’ president and CEO.
“This decision aligns with our consumer-led premiumisation strategy to deliver accelerated growth and shareholder value as we continue to focus our wine and spirits portfolio on higher-end, fast-growing brands.
“For Heaven Hill, Black Velvet is a historic, well-known, and high-volume brand that complements their broad distilled spirits portfolio and aligns with their business strategy.”
The divestment of Black Velvet comes after a number of minority stake investments by Constellation through its venture capital arm.
As part of the firm’s Focus on Female Founders programme, Constellation completed its first investment in Texas-based bottled cocktail company Austin Cocktails and premium alcohol producer Vivify Beverages in December 2018. Last month, the The New York-headquartered firm made a minority investment in American rum producer Montanya Distillers through the programme.
Constellation also recently expanded its footprint in American whiskey with the acquisition of a majority stake in Tennessee-based Nelson’s Green Brier Distillery in May. This was followed by the purchase of a minority stake in Los Angeles-based Mezcal El Silencio.
The firm made a US$4bn investment in Canadian cannabis producer Canopy Growth Corporation last year.