Constellation Brands Agrees to End Majority Control of Sands Family
June 30 2022 - 8:36AM
Dow Jones News
By Will Feuer
Constellation Brands Inc. said its board has agreed to a plan
that would see the controlling family of the brewer of Corona and
Modelo beers relinquish majority voting power of the company.
In April, the Sands family proposed exchanging their powerful
Class B shares for Class A stock.
Constellation Brands said a special committee of independent
directors on the company's board has recommended that the Victor,
N.Y.-based beer, wine and spirits maker agree to the proposal to
eliminate its Class B shares. The board has approved the proposal
and will recommend shareholders vote for it at a special meeting,
which has yet to be set.
The board's plan would allow holders of Class B shares to
convert their shares into Class A stock, plus $64.64 per Class B
share in cash, which the company said reflects a total amount of
$1.5 billion. That marks a 26.5% premium over Class A shares of
Constellation, based on their closing price on Wednesday.
The agreement comes after Rob Sands, Constellation's executive
chairman and former chief executive officer, proposed in April a
deal that would exchange each Class B share owned for 1.35 shares
of Class A stock. The Sands family collectively holds more than 98%
of the B shares of the wine and spirits maker.
Mr. Sands' proposal would reduce the voting control the family
holds in Constellation to roughly 20% from about 60% currently.
Class B shares convey 10 votes apiece while Class A shares convey
one, giving the family greater influence on matters requiring
shareholder votes such as mergers and acquisitions.
Constellation Brands said eliminating the Class B shares would
improve the company's governance profile, potentially attract new
investors who prefer single voting class common stock structures
and save administrative costs tied to maintaining the dual-stock
structure.
"The Company's simplified capital structure will provide a solid
foundation as the Company continues to pursue its strategic growth
initiatives and capital allocation priorities to build shareholder
value," Constellation Brands Chief Executive Bill Newlands
said.
Additionally, Rob and Richard Sands, who currently serve as
executive chairman and executive vice chairman, respectively, would
step down from their executive positions. Rob Sands will become
non-executive chairman while Richard Sands would remain a member of
the board.
The company said it expects the Sands family to remain
Constellation Brands' largest shareholder following the
reclassification.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
June 30, 2022 08:21 ET (12:21 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
Constellation Brands (NYSE:STZ)
Historical Stock Chart
From Aug 2024 to Sep 2024
Constellation Brands (NYSE:STZ)
Historical Stock Chart
From Sep 2023 to Sep 2024