(Adds E.J. Gallo Winery response)
March 15 (Reuters) - Corona beer maker Constellation Brands Inc is in advanced talks to sell some of its low-end wines to privately held E.&J. Gallo Winery, CNBC reported on Friday, citing people familiar with the situation.
In early February, Constellations said it was looking to sell some of its lower-end wine brands, as it doubles down on more profitable high-end segment and shift towards beer and cannabis products that target a younger demographic.
The sale could fetch around $2 billion or less, the CNBC report said, adding that the talks are still ongoing and could fall apart.
Constellation said it doesn’t respond to rumors or speculations. However, the company added it is considering a variety of options to grow its wine portfolio and profitability.
E.&J. Gallo said it would not comment on “matters such as these”.
Reuters, citing sources, first reported in October last year that the Modelo beer maker was looking to sell some of its U.S.-based wine brands such as Clos du Bois, Mark West and Arbor Mist in a deal that could be worth more than $3 billion.
This would not be the first time Constellation has explored divesting some wine brands. In 2016, it agreed to sell its Canadian wine business to Ontario Teachers’ Pension Plan for about C$1.03 billion.
The brewer in January cut its full-year profit forecast for 2019, weighed down by weak wine and spirit sales and costs related to its $3.8 billion investment in Canadian pot producer Canopy Growth Co. (Reporting by Soundarya J in Bengaluru; Editing by Maju Samuel)