S&P: Constellation Brands on watch

Standard & Poor's said it placed its BB corporate credit, senior secured debt and senior unsecured debt ratings, B+ subordinated debt rating and B preferred stock rating on Constellation Brands Inc. on CreditWatch negative.

Constellation Brands announced its all-cash offer to acquire The Robert Mondavi Corp. for $1.3 billion. The CreditWatch placement reflects S&P's concern that Constellation Brands' announcement could start a competitive bidding process for Mondavi, which in turn could lead to a significant escalation of the current offering price.

S&P said it believes, based on publicly available information, that a combination with Mondavi would strengthen Constellation Brands' business profile, enhancing its position as one of the largest global wine producers by adding breadth to its worldwide wine portfolio and providing Constellation Brands with additional growth opportunities.

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