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Constellation Brands to divest Canadian whiskey brand

New York-based brewer Constellation Brands Inc. will sell its Black Velvet Canadian Whisky brand and its associated production facility in Canada to Heaven Hill Brands for about $266 million.

The deal also includes a subset of Canadian whiskey brands produced at the Lethbridge, Alberta facility, according to an Aug. 12 release.

The transaction is expected to be closed in the second half of 2019, subject to customary regulatory approvals.

"This decision aligns with our consumer-led premiumization strategy to deliver accelerated growth and shareholder value as we continue to focus our wine and spirits portfolio on higher-end, fast-growing brands," Constellation Brands CEO Bill Newlands said in a statement.

Net sales for the brands included in the divestment totaled $67 million during Constellation's fiscal 2019. The company said the purchase price represents a multiple of gross profit after marketing in the range of eight to nine times.