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| STZ > SEC Filings for STZ > Form 8-K on 15-Feb-2013 | All Recent SEC Filings |
15-Feb-2013
Entry into a Material Definitive Agreement, Creation of a Direct Finan
Amended and Restated Membership Interest Purchase Agreement
Constellation Beers Ltd., a Maryland corporation ("Constellation Beers"), an indirect wholly-owned subsidiary of Constellation Brands, Inc., a Delaware corporation ("Constellation"), currently owns a 50% interest in Crown Imports LLC ("Crown Imports"). Crown Imports is a joint venture with GModelo Corporation, a Delaware corporation ("Seller") and a wholly-owned subsidiary of Grupo Modelo, S.A.B. de C.V. ("Modelo"), through which Modelo's Mexican beer portfolio (the "Modelo Brands") has been imported, marketed and sold in the U.S. since January 2007. Seller owns the other 50% interest in Crown Imports, which has the exclusive right to import, market and sell primarily the Modelo Brands, which include Corona Extra, Corona Light, Modelo Especial, Pacifico, Negra Modelo and Victoria, in all 50 states of the U.S., the District of Columbia and Guam pursuant to the terms of an Importer Agreement, dated as of January 2, 2007, by and between Extrade II, S.A. de C.V. ("Extrade") and Crown Imports (as amended, the "Existing Importer Agreement").
On June 28, 2012, Constellation Beers, Constellation Brands Beach Holdings, Inc., a Delaware corporation and indirect wholly-owned subsidiary of Constellation ("CBBH"), Constellation and Anheuser-Busch InBev SA/NV, a Belgian corporation ("ABI"), entered into a Membership Interest Purchase Agreement (the "Initial Purchase Agreement"). On February 13, 2013, Constellation Beers, CBBH, Constellation and ABI entered into an Amended and Restated Membership Interest Purchase Agreement (the "Crown Purchase Agreement") that amended and restated the Initial Purchase Agreement. Pursuant to the Crown Purchase Agreement, ABI will cause the Seller to sell, and Constellation Beers and CBBH will purchase, Seller's membership interest in Crown Imports (the "Purchased Interest"). Constellation Beers will purchase 98% of the Purchased Interest, and CBBH will purchase 2% of the Purchased Interest. As a result of the purchase of the Purchased Interest by Constellation Beers and CBBH (the "Crown Purchase"), Constellation Beers will own a 99% interest in Crown Imports, CBBH will own a 1% interest in Crown Imports and Crown Imports will become an indirect wholly-owned subsidiary of Constellation. The purchase price for the Purchased Interest is $1,845 million, to be paid on the date of the closing of the Crown Purchase.
The Crown Purchase Agreement contemplates that ABI and Constellation will enter into an Interim Supply Agreement (the "Interim Supply Agreement") at the closing of the transactions contemplated by the Crown Purchase Agreement (the "Crown Closing"). Pursuant to the Interim Supply Agreement, ABI will supply Crown Imports with the Modelo Brand products required by Crown Imports for delivery and sale to Crown Imports' customers in the U.S. (including the District of Columbia and Guam), subject to certain limitations based on Crown Imports' product supply forecasts under the Interim Supply Agreement. The prices for products purchased under the Interim Supply Agreement are fixed for the term, subject to an annual adjustment based on the U.S. consumer price index. The Interim Supply Agreement has a three year term, subject to two one-year extensions at Crown Imports' option in the event the planned expansion of the Piedras Negras Brewery (as defined below) has not been completed prior to the third or fourth anniversary, respectively, of the Crown Closing. Simultaneously with the consummation of the Crown Closing, the Existing Importer Agreement would be terminated.
The closing of the Crown Purchase is subject to certain closing conditions including the receipt of necessary Mexican antitrust approval relating to the Brewery Purchase (as defined below) and the consummation of certain transactions between ABI and Modelo and certain of its affiliates (the "GM Transaction"), which is subject to the receipt of necessary U.S. and Mexican antitrust and other regulatory approvals. The Crown Purchase Agreement may be terminated by either Constellation or ABI if the Crown Purchase has not been consummated by December 30, 2013 or if the GM Transaction is terminated. If the Crown Purchase Agreement is terminated because the GM Transaction is terminated, ABI must
See the information under the caption "Second Amended and Restated Interim Loan Agreement" in Item 1.01 which is incorporated herein by reference.
On February 15, 2013, Constellation issued a news release, a copy of which is furnished herewith as Exhibit 99.1 and is incorporated herein by reference, in which Constellation announced that it will redeem its $650 million 4.625% Senior Notes due 2023.
References to Constellation's website in the release do not incorporate by
reference the information on such website into this Current Report on Form 8-K,
and Constellation disclaims any such incorporation by reference. The information
in the news release attached as Exhibit 99.1 is incorporated by reference into
this Item 7.01 in satisfaction of the public disclosure requirements of
Regulation FD. This information is "furnished" and not "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, and is not otherwise subject
to the liabilities of that section. It may be incorporated by reference in
another filing under the Securities Exchange Act of 1934 or the Securities Act
of 1933 only if and to the extent such subsequent filing specifically references
the information incorporated by reference herein.
On August 14, 2012, Constellation issued $650,000,000 aggregate principal amount of 4.625% Senior Notes due 2023 (the "Notes"). An amount equal to 100% of the principal amount of the Notes (the "Escrow Property") was placed into an escrow account pursuant to the term of an escrow agreement, dated as of August 14, 2012 (the "Escrow Agreement"), among Constellation, Manufacturers and Traders Trust Company ("M&T"), in its capacity as Trustee, and M&T, as escrow agent (the "Escrow Agent"). Pursuant to the Escrow Agreement, the Escrow Property could be released to Constellation only in the context of a purchase of the Purchased Interest pursuant to the terms of the Initial Purchase Agreement. Because of the differences between the Transaction and the transaction contemplated by the Initial Purchase Agreement, Constellation has determined that the conditions for the release of the Escrow Property cannot be satisfied. Constellation intends to give notice to the Escrow Agent on February 19, 2013, to release the Escrow Property to the paying agent under the supplemental indenture under which the Notes were issued (the "Supplemental Indenture") for purposes of effecting the special mandatory redemption contemplated by the Supplemental Indenture. As a result, all of the Notes will be redeemed on February 20, 2013, at a redemption price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest to but excluding February 20, 2013. Upon such redemption, the Escrow Agreement will terminate.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Shell company transactions.
Not applicable.
(d) Exhibits.
The following exhibit is furnished as part of this Current Report on Form 8-K:
Exhibit
No. Description
99.1 News Release of Constellation Brands, Inc. dated February 15, 2013.
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