Constellation Brands, Inc. (NYSE: STZ), (ASX: CBR) announced today that its outstanding depositary shares, each representing 1/40th of a share of Constellation’s 5.75% Series A Mandatory Convertible Preferred Stock (the “Preferred Stock”), automatically converted into shares of Constellation’s Class A Common Stock, pursuant to the terms of the certificate of designations governing the Preferred Stock and the deposit agreement governing the depositary shares. The depositary shares converted at a rate of 1.4638 shares of Class A Common Stock per depositary share.
The automatic conversion, together with optional conversions during August 2006, increased Constellation’s outstanding shares of Class A Common Stock by approximately 9,983,000 shares. As a result of the automatic conversion, Constellation will no longer pay quarterly dividends on the Preferred Stock. No fractional shares of Constellation’s Class A Common Stock were issued in the automatic conversion. Each holder of depositary shares is receiving cash in lieu of any fractional shares of Constellation’s Class A Common Stock otherwise issuable upon conversion of the depositary shares.
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