Alcoholic beverages producer Constellation Brands has signed an agreement to sell its Black Velvet Canadian Whisky brand and related production facility in Lethbridge, Alberta to Heaven Hill Brands for approximately $266m.

The deal also includes a subset of Canadian whisky brands produced at Lethbridge facility.

Constellation Brands president and CEO Bill Newlands said: “We are relentlessly focused on the consumer and building a portfolio of brands consumers love today, while pushing beyond to meet their evolving needs well into the future.

“This decision aligns with our consumer-led premiumisation strategy to deliver accelerated growth and shareholder value as we continue to focus our wine and spirits portfolio on higher-end, fast-growing brands.

“For Heaven Hill, Black Velvet is a historic, well-known, and high-volume brand that complements their broad distilled spirits portfolio and aligns with their business strategy.”

The divestiture is reported to be in line with the company’s transformation strategy.

Completion of the deal is subject to regulatory approvals and is expected to occur in the second half of this year.

Constellation’s spirits brand portfolio includes SVEDKA Vodka, High West Whiskey, Casa Noble Tequila, Mi CAMPO Tequila and Nelson’s Green Brier.

Through its venture capital group, Constellation Brands has invested in higher-end, distinctive spirits brands such as Austin Cocktails, Bardstown Bourbon Company, El Silencio and The Real McCoy.

Last month, Constellation Brands acquired a minority stake in Colorado-based craft rum maker Montanya Distillers.

The company made the investment through Constellation Brands Ventures’ Focus on the Female Founders programme.

The programme invests in female-founded and female-led businesses that focus on disruptive and innovative work across alcoholic beverages.

Constellation Brands and Montanya Distillers have yet to disclose the terms of the transaction.