DOW JONES NEWSWIRES

Constellation Brands Inc. (STZ) will sell its so-called value spirits business to Sazerac Co. for $334 million as the company looks to focus on its premium and higher-margin brands.

Constellation, which will use the proceeds from selling more than 40 brands to pay down debt, recently said its mid-premium liquor brands like Svedka vodka and Black Velvet whiskey continue to outperform their peers in the market.

The world's largest wine maker company by volume will retain both of those brands among its liquor offerings along with Paul Masson brandy. Chief Executive Rob Sands said the trio fits into Constellation's strategy of focusing on well-known, trusted premium brands. Their operations will be consolidated into Constellation's North American wine business.

Being sold are brands such as Barton, Skol, Flieischmann's, Montezuma Tequila and the Chi-Chi's pre-mixed cocktail line. The brands combined sold more than 10 million cases in the fiscal year ended last February. The sale will also include distillery and bottling plants in Kentucky and will result in roughly 20 cents a share in write-downs.

The company, however, reaffirmed its fiscal-year earnings outlook excluding items, saying the transaction wouldn't impact the results.

Last week, the company reported fiscal third-quarter net income dropped 30% on charges and lower sales because of the stronger dollar.

Sazerac's liquors include bourbon, vodka and whiskey.

Constellation's shares closed Friday at $14.89 and haven't traded premarket.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@dowjones.com

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