Constellation Brands of the US and Australia's BRL Hardy yesterday agreed to join forces in a 1.9 billion Australian dollars (€1.05 billion) deal.

Constellation said buying Hardy's would create the world's biggest wine company by sales value, with turnover of US$1.7 billion (€1.6 billion). However, it said it would still produce less wine than E&J Gallo of the US.

Constellation, based in upstate New York, will pay Aus$10.5 a share for Hardy, at the top end of expectations. Constellation will also take on about US$325 million in net debt.

Hardy will be absorbed into Constellation's wine division but will be run from Adelaide by Mr Stephen Millar, Hardy's managing director.

Mr Millar said yesterday: "There isn't a Coca-Cola, a Microsoft or a Nestlé in our industry. We certainly intend to be that."

The enlarged business, with a portfolio of new world wines spanning the US, Australasia and Chile, will be number one in the UK and Australian markets in volume terms and the second-largest in the US and New Zealand. The deal will bring together Constellation wines such as Stowells of Chelsea and Franciscan, and Hardy's Nottage Hill and Banrock Station. - (Financial Times Service)