STZB Constellation Brands, Inc.(Class B)

Constellation Brands Inc. has put its Canadian wine business on the block in an auction that could reap more than $1 billion, say people familiar with the matter.

The Victor, N.Y.-based company has already received offers for the Canadian business from several parties, including the Ontario Teachers' Pension Plan and a buyer from the alcohol industry, whose identity couldn't be confirmed.

A Constellation spokeswoman declined to comment

The sale reflects Constellation's strategic goal of streamlining its business to focus on premium wines and beer in the U.S. Publicly traded Constellation began as a bulk wine purveyor in the 1940s and expanded through the takeover of popular wine brands like Robert Mondavi and Clos du Bois.

Over the past year and a half, the company has agreed to buy Meiomi, a higher-priced Pinot Noir brand, and The Prisoner Wine Co.'s portfolio of luxury wine brands. In 2013, Constellation acquired rights to Grupo Modelo's U.S. beer business, which includes the popular Mexican beer brands, Corona Extra and Modelo Especial.

Constellation said last April that it planned to explore an initial public offering for the Canadian business. That changed when the company received takeover overtures for the business, according to two people familiar with the company's plan. Goldman Sachs is advising Constellation on the sale, said people familiar with the process.

Bought in 2006 in its roughly $1.1 billion takeover of Vincor International Inc., the company said its Canadian business now accounts for about 10% of total sales, roughly $655 million for the fiscal year ended Feb. 29. It includes eight Canadian wineries, about 1,700 acres of Canadian vineyards and a network of growers who support Canadian-made brands.

The company would sell off Canadian wineries like Jackson-Triggs and Inniskillin but retain the more international and U.S. brands it acquired in 2006 such as New Zealand's Kim Crawford and California's Toasted Head. In 2010, it sold to a private-equity firm some of the Australian and U.K . businesses it acquired from Vincor in a roughly $290 million deal.

The business also includes 160-plus wine rack stores in Ontario. Those retail licenses will lose some value after Oct. 28 when a new law makes wine available at grocery stores in Ontario. Eventually, up to 300 grocery stores will be licensed to sell wine.

Speaking in April, Chief Executive Rob Sands said that the public offering would benefit the company by making a "very high performing business…a lot more visible." He said that it would help the company manage its debt and pursue other acquisitions in the premium wine segment.

RBC Capital Markets analyst Nik Modi, who follows the company, said shedding the Canadian business makes sense strategically.

"They have the cover to do it now because their business is performing so well," Mr. Modi said.

Sales of the company's Corona Extra and Modelo Especial beer brands have been soaring. Constellation's net sales increased 35% to $6.55 billion in the most recent fiscal year from $4.87 billion two years earlier.

Write to Jacquie McNish at Jacquie.McNish@wsj.com and Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

September 30, 2016 15:35 ET (19:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.