Constellation Brands to Purchase Premium SVEDKA Vodka

07/02/07 Constellation Brands, Inc., a leading international supplier and marketer of beverage alcohol, announced it has reached agreement with Guillaume Cuvelier and Belgian-based Alcofinance S.A., the owners of SVEDKA Vodka, to acquire the brand and related business for $384 million. The transaction, which includes the acquisition of Spirits Marque One LLC, the SVEDKA brand owner, is expected to close approximately March 1, 2007.

SVEDKA, an 80 proof premium vodka produced in Sweden, was launched in 1998 and it is now the fastest growing major imported premium vodka in the United States. Approximately 1.1 million cases of SVEDKA were sold during calendar 2006, predominantly in the U.S., a 60 percent increase over 2005 sales volume.

"SVEDKA's phenomenal success is largely due to the eye-catching and effective marketing and advertising campaigns that reach a key segment of the young adult market," commented Richard Sands, Constellation Brands chairman and chief executive officer. "SVEDKA complements and enhances our premium spirits offerings by providing a popular and rapidly growing vodka brand in the largest U.S. spirits category. It has strong brand equity and positive momentum, which we can build upon through increased U.S. distribution, as well as international expansion. We believe SVEDKA is a perfect fit, providing us with a platform for expansion of our premium spirits portfolio. With continued marketing investment we will look to maximize the brand's long-term growth potential and value," concluded Sands.

Spirits Marque One founder, and SVEDKA creator, Guillaume Cuvelier will lead the New York-based brand management team with the same independent spirit that has successfully differentiated SVEDKA from the competition. The brand marketing and sales team will retain their autonomy with the SVEDKA_Grl campaign continuing to promote the brand.

"Constellation recognizes SVEDKA's unique culture and capabilities," stated Cuvelier. "Its management realizes SVEDKA's future is extremely bright and they will fully support us as we continue to build upon the brand's current phenomenal growth rate and marketplace momentum. Our entrepreneurial culture fits perfectly with Constellation's, which differentiates our companies from others in the business."

SVEDKA is the fastest growing major premium vodka imported to the U.S., and fifth largest imported vodka with eight percent market share in the imported vodka category according to Information Resources, Inc. (IRI) data. SVEDKA is 40 percent alcohol by volume (80 proof) and is also available in four, 70 proof (35 percent alcohol by volume) flavor variations: Citron, Clementine, Raspberry and Vanilla.

Constellation estimates that this acquisition will be dilutive to diluted earnings per share by approximately $0.05 - $0.06 for fiscal 2008. It is also expected to be dilutive the following two fiscal years, before becoming accretive. The transaction will be financed with debt under Constellation's senior credit facility. The transaction is also subject to customary regulatory approvals and other closing conditions.