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Home » Valentine's Day » Constellation Brands closes sale with E. & J. Gallo Winery

Constellation Brands closes sale with E. & J. Gallo Winery

Constellation Brands, Inc. closed its transaction with E. & J. Gallo Winery to divest a portion of Constellation’s wine and spirits portfolio principally priced at $11 retail and below, including certain related facilities located in California, New York, and Washington state.

The aggregate transaction price was approximately $810 million, consisting of approximately $560 million in cash paid at closing and the opportunity to receive up to $250 million in earnout payments if brand performance targets are met over a two-year period after closing. The transaction price reflects various adjustments of approximately $220 million related primarily to changes in inventory for which Constellation has already received the benefit.

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Constellation also closed its separate but related transaction with Gallo to divest the Nobilo wine brand and certain related assets and liabilities for approximately $130 million, subject to certain post-closing adjustments.

“The closing of these deals positions our wine and spirits business for accelerated revenue growth and operating margin performance going forward,” said Bill Newlands, Constellation Brands’ president and chief executive officer. “We continue to see the staying power of consumer-driven premiumization trends, and these moves align with our vision of building a winning portfolio of bold and distinctive higher-end brands. We are grateful for the dedication of our internal teams, and the support and collaboration from Gallo and our business partners to help us close these transactions and ensure as smooth a transition as possible.”

Separately, Constellation has also closed its transaction with Vie-Del Company to divest certain brands used in Constellation’s grape juice concentrate business, together with related inventory, interests in certain contracts, and liabilities. Constellation’s agreement with Sazerac to divest the Paul Masson Grande Amber Brandy brand, related inventory, and interests in certain contracts for approximately $255 million, subject to certain closing and post-closing adjustments, has been authorized by the Federal Trade Commission and is expected to close in January 2021.

Constellation’s remaining wine and spirits portfolio represents a collection of powerhouse brands such as the iconic Robert Mondavi brand family, The Prisoner Wine Company brand family, Kim Crawford – the #1 sauvignon blanc in the U.S. market, Meiomi – the #1 pinot noir in the U.S., and SVEDKA Vodka – the #1 imported vodka in the U.S. The company’s portfolio also includes a collection of highly-rated, higher-end brands such as SIMI, Schrader Cellars, Mount Veeder Winery, High West Whiskey, and Casa Noble Tequila, as well as premium wine innovations such as Unshackled, High West barrel finished cocktails, Meiomi Cabernet Sauvignon, and Kim Crawford Illuminate.

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