Constellation Brands, Inc.

With Nexen, Inc out of the way… I’m on the look out for the next special situations play. I’ve started building a position in Constellation Brands, Inc. (Ticker: STZ). This company will be the prime beneficiary in Anheuser-Busch InBev’s (Ticker: BUD) acquisition of Grupo Modelo. Anheuser-Busch has agreed to sell control of the Modelo brands such as Corona in the US and a Mexican brewery to Constellation Brands for a very fair (cheap) price. There is a good probability that the DOJ will accept this remedy in order to allow Anheuser-Busch to proceed with its acquisition of Grupo Modelo. This will be a transformational deal for Constellation Brands making it the 3rd largest beer company in the US. I really like this deal for Constellation Brands and should know in mid-March regarding the decision from the DOJ. I can see Constellation Brands easily going to $50+ with the ok from the DOJ.