RPT-UPDATE 3-Constellation, Modelo end fight over joint venture

* Dispute over Crown Imports marketing costs is settled

* Settlement covers marketing costs for duration of JV

* Terms not disclosed

* Constellation shares up 3.8 percent
(Adds analyst comment, updates shares)

NEW YORK, Oct 29 (BestGrowthStock) – U.S. wine and spirits maker
Constellation Brands Inc (STZ.N: ) and a subsidiary of Mexican
brewer Grupo Modelo (GMODELOC.MX: ) have settled a dispute over
marketing expenses from their Crown Imports joint venture.

Constellation and Modelo each have a 50 percent stake in
Crown Imports, which imports Corona, Pacifico and Negra Modelo
beers into the United States.

Constellation shares were up 3.8 percent in morning trading
as investors expressed relief at the settlement of a dispute
affecting an important partnership for the company.

“It’s never good to have a partnership with one partner
suing the other. It was a weight on this story and a weight on
this stock,” said D.A. Davidson & Co analyst Timothy Ramey.

The companies’ joint statement on Friday did not disclose
the terms of the settlement.

Constellation Chief Executive Officer Rob Sands and Modelo
CEO Carlos Fernandez said in the statement that Crown would
still have “world-class marketing and promotional programs,”
but the companies did not reveal the size of or any changes to
those budgets.

Modelo sued in December, saying it had to cover marketing
costs at Crown for 2010 that Constellation refused to refund.
The case was before the New York Supreme Court.

The companies said their agreement covered 2010 and the
rest of the term of the joint venture agreement, which ends in
2016.

Earlier this month, Constellation said equity earnings from
the joint venture fell 10 percent to $65.3 million in the
quarter ended on Aug. 31 due to lower volumes, higher
promotions and the selling of more lower-priced beers.
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Shares of Constellation were up 73 cents to $19.77 in
morning trading on the New York Stock Exchange.
(Reporting by Phil Wahba, editing by Lisa Von Ahn and John
Wallace)

RPT-UPDATE 3-Constellation, Modelo end fight over joint venture