Constellation Brands Announces Glass Sourcing Strategy and Incremental Five Million Hectoliter Capacity Expansion at Nava Brewery in Mexico

Agrees to acquire glass plant and associated warehouse, land and rail infrastructure in Nava, Mexico from Anheuser-Busch InBev for approximately $300 million pending U.S. Department of Justice and Mexican regulatory approvals

Agrees to enter into 50-50 joint venture with Owens-Illinois to own and operate new glass plant and to use O-I as a secondary glass supplier

Enters into long-term glass supply agreement with Vitro

Begins additional five million hectoliter production capacity expansion at Nava Brewery in Mexico

Updates future beer segment volume growth, capital expenditure investments and operating margin, as well as consolidated free cash flow targets

VICTOR, N.Y., OCT. 2, 2014 - Constellation Brands, Inc. (NYSE:STZ and STZ.B), a leading beverage alcohol company, announced today a multi-faceted approach to glass sourcing for the company`s beer business that includes the following components:

Constellation and Anheuser-Busch InBev SA/NV (ABI) have submitted to the U.S. Department of Justice, a proposal for Constellation to acquire ABI`s state-of-the-art glass production plant that is located adjacent to the company`s brewery in Nava, Mexico for approximately $300 million. This transaction also includes the purchase of a high-density warehouse, land and rail infrastructure and, along with customary closing conditions, is subject to U.S. Department of Justice and Mexican regulatory approvals, both of which are expected to be received before the end of calendar year 2014. The glass plant currently has one operational glass furnace and plans are in place to scale it to four furnaces. When fully operational with four furnaces, this facility is expected to supply more than 50% of the glass needs for Constellation`s U.S. beer business. Constellation currently plans to make capital investments of approximately $175 - $225 million to enhance site infrastructure related to rail and warehouse expansion at the newly acquired site.

Constellation has also agreed to enter into a 50-50 joint venture with Owens-Illinois (O-I) to own and operate the glass container production plant to be purchased from ABI. O-I will contribute approximately $100 million for its 50% share of the joint venture, which does not include the warehouse, land and rail infrastructure, as these assets will be held by Constellation outside of the joint venture.

The joint venture will provide bottles exclusively for Constellation`s adjacent Nava Brewery. O-I will have primary responsibility for plant operations including purchasing, technical services and the plant expansion. Plans are in place to expand the capacity of the plant from one furnace to four furnaces over the next four years at a cost of approximately $300 - $400 million. The expansion costs are expected to be shared equally by Constellation and O-I.

The joint venture management team will report to the JV`s board of directors, which will be comprised of an equal number of management team members from Constellation and O-I. The approximately 260 employees currently working at the glass plant will continue to work at that location. Once the glass plant is expanded to four furnaces, the number of employees working at the plant is estimated to reach approximately 800. It is expected that the joint venture will become operational before year end calendar 2014 at which point the financial results of the joint venture will be consolidated by Constellation. At that time, O-I also expects to become a secondary glass supplier outside of the joint venture arrangement.

Constellation previously announced that it had entered into a long-term supply agreement with Vitro (S.A.B. de C.V.). Under this agreement, Vitro is expected to supply 25% - 30% of the company`s beer glass requirements during a seven year time period beginning Oct. 1, 2014.

Due to the transitional nature of these new sourcing arrangements, Constellation`s beer business expects to continue to purchase glass supply for production at the Nava Brewery under the existing Transition Services Agreement with ABI through mid-year calendar 2015. Constellation will also continue to receive finished product under its Interim Supply Agreement with ABI until the expansion of the Nava Brewery to 20 million hectoliters is completed in calendar 2016.

In addition to the company`s glass sourcing activities, Constellation has started an additional five million hectoliter expansion at the Nava Brewery in Mexico that will extend production capacity to 25 million hectoliters when completed. The estimated cost of the expansion from 20 million to 25 million hectoliters is $450 - $550 million and is expected to be completed by the end of calendar year 2017.

"We are pleased that we have been able to finalize our long-term glass strategy under favorable terms with key industry players," said Rob Sands, president and chief executive officer of Constellation Brands. "We believe this provides the best outcome in terms of quality, flexibility, cost-effectiveness and control for this critical area of our beer production. We look forward to working with our supply partner, Owens-Illinois, who has more than 100 years of experience in producing glass containers. As the world`s leading glass producer, O-I is known for high quality standards, has built and expanded dozens of plants, and participates in joint ventures in several different countries throughout the world." Sands continued, "We are also pleased with the outcome of our beer glass supply arrangement with Vitro, which provides an optimal sourcing option and enables us to partner with a leader in the beer glass supply industry."

"Since completing the beer business acquisition in June 2013, our beer business has seen exceptional portfolio momentum, significantly outperforming the U.S. beer market as well as our original sales volume and depletion expectations," said Bob Ryder, chief financial officer of Constellation Brands. "This excellent sales momentum, coupled with strong marketing and brand building, is expected to drive sales trends that will outpace the industry in the medium-term. Our additional investments in production capacity are designed to ensure that we are well-positioned to capture the continued momentum and growth opportunities we see in the marketplace for our portfolio well into the future."