Whiskey giant's wine business on the block

From the Associated Press

NEW YORK — There may be two more wine businesses up for sale as some parts of the industry struggle with weak sales volumes and pricing.

Brown-Forman Corp., the maker of Jack Daniel's whiskey, is putting its wine business on the block, The Wall Street Journal reported online late Monday, citing unnamed sources. The company, based in Louisville, KY, has reportedly hired Rothschild to run the auction process after its wine business -- which includes brands such as Fetzer and Bonterra Vineyard -- delivered sluggish sales for several years.

The deal could fetch a few hundred million dollars, according to the report. Brown-Forman and Rothschild declined to comment.

The paper also said that people familiar with matter expect Constellation Brands Inc. to sell the bulk of its non-U.S. wine business to an unknown buyer as soon as this week. That deal is reportedly valued between $300 and $400 million.

Constellation Brands, based in Victor, NY, did not return calls seeking comment.

UPDATE (December 28): Strong international sales helped Brown-Forman Corp. make up for a lackluster U.S. performance and post a 5% increase in its second-quarter profit. Brown-Forman raised its full-year earnings forecast to a range of $3.18 to $3.42 per share. That's up from $2.98 to $3.38 per share.

"Based on our first-half success, we have more confidence in our outlook for the remainder of the year and reflected that in our guidance," Brown-Forman CEO Paul Varga said in a statement.

The company earned net income of $154 million ($1.05 per share) in the three months ending Oct. 31. That's up from $147.3 million (99 cents per share) a year earlier.

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