Constellation in talks with Australian Vintage

Wine and spirits maker Constellation Brands Inc. said Monday it is mulling a deal to sell some of its assets or combine part of its Australian and U.K. wine operations with Australian Vintage Ltd., an Australian wine company.

In return, Constellation, which makes Robert Mondavi wine, would receive a substantial, but non-controlling, interest in the combined entity.

The combined companies would operate as a stand-alone wine company that would be listed on the Australian Stock Exchange.

"The Australian wine industry is facing unprecedented negative operating conditions," said Rob Sands, president and chief executive officer of Constellation Brands. "This combination would create a more competitive entity better positioned to deal with the current environment."

Constellation Brands said discussions are preliminary and may not lead to a deal.