Constellation Brands, Inc. · NYSE:STZ
Constellation Brands — Merger or Acquisition (November 2005)
10 slides from Constellation Brands's merger presentation, Nov 15, 2005
Slide 1: Constellation Brands Discussion of Vincor's Directors' Circular
November 11, 2005 Constellation Brands Discussion of Vincor's Directors' Circular
Slide 2: Introduction
Introduction Vincor's results continue to demonstrate its strategic challenges and weaknesses Vincor's synergy estimates and price targets are unrealistic Constellation's all cash offer is firm and binding and provides shareholders with certainty and speed Exclusion of Constellation from Vincor's pr
Slide 3: Operating Income is Declining at an Accelerating Rate Since the Western Wines Acquisition
Operating Income is Declining at an Accelerating Rate Since the Western Wines Acquisition Vincor's Declining Profits Demonstrate its Strategic Challenges 2Q FY05 Adjusted 26.9m 26.0m -7.9% Pro Forma Decline 24.8m Vincor's profit trend is weak; These results mark the 6th out of 8 quarterly misses rel
Slide 4: Vincor's Lack of Scale is Leading to Significant Weakness in its Key International Markets
Vincor's Lack of Scale is Leading to Significant Weakness in its Key International Markets Vincor has realized no SG&A leverage despite acquisitions because they lack scale outside of Canada U.S. Excluding Kumala, the sales of the portfolio are down significantly Overall, net sales are declining (on
Slide 5: Vincor's Synergy Estimates are Unrealistic
Vincor's Synergy Estimates are Unrealistic Vincor's estimate of available synergies is between 14% and 21% of Vincor's LTM revenue This is well in excess of the industry average of 6% for comparable transactions The level of overlap between Constellation's operations and those of Vincor is modest Ap
Slide 6: The cost savings Vincor continues to discuss are inconsistent with industry precedent
11.7% 11.2% 10.2% 9.1% 7.5% 2.1% 1.8% 1.0% 1.2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Acquiror Foster's Interbrew Southcorp Coors Constellation Constellation Lion Nathan Interbrew SAB Allied Domecq Target Southcorp AmBev Rosemount Molson Robert Mondavi BRL Hardy Petaluma Bass-Whitbread Miller Bodeg
Slide 7: Constellation's Takeover Bid is all Cash and is Firm and Binding
Constellation's Takeover Bid is all Cash and is Firm and Binding All shareholders are entitled to tender at our offer price; we plan to cash out all shareholders at the same price in a second-step merger transaction Our conditions are customary We have made all of our required regulatory filings and
Slide 8: Vincor's Shareholders Have a Vested Interest in Admitting Constellation to the Process to Create Value
Vincor's Shareholders Have a Vested Interest in Admitting Constellation to the Process to Create Value Constellation may increase its offer with access to information Vincor obviously believes that Constellation is one of the best, if not the best buyer for the business What value is there in exclud
Slide 9: Conclusion
Conclusion Vincor's results continue to demonstrate its strategic challenges and weaknesses Vincor's synergy estimates and price targets are unrealistic Constellation's all cash offer is firm and binding and provides shareholders with certainty and speed Exclusion of Constellation from Vincor's proc
Slide 10: Constellation Brands Discussion of Vincor's Directors' Circular
November 11, 2005 Constellation Brands Discussion of Vincor's Directors' Circular
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