Constellation sells 30 brands of wine to Gallo for $ 1.7 billion

Constellation Brands has sold approximately 30 of its low-cost wine brands and related facilities to E&J Gallo in a $ 1.7 billion deal as part of a strategy to streamline and enhance your portfolio.

The New York-based beverage producer, which is also responsible for Corona and Modelo beers, has signed a deal that will see its wine brands selling for US $ 11 and under, including Clos du Bois, Black Box, Estancia, Marc West, Wild Horse, Franciscan and Ravenswood, as well as six winemaking facilities, at E&J Gallo.

These wineries include Mission Bell, Turner Road Vintners, Clos du Bois and Wild Horse in California, Caves Hogue at Washington, and Canandaigua At New York.

Commenting on the sale, Joseph E. Gallo, CEO of Gallo, said: “We are committed to remaining a family business focused on growing the wine industry. As we continue to invest in our premium and luxury business, we see a tremendous opportunity with this acquisition to attract new consumers to the wine category, ”adding,“ We ​​will continue to provide our customers and consumers with products. quality at all prices. “

The deal follows rumors that Constellation was set to sell up to 40% of its portfolio in February, after reporting weaknesses in sales at its low-end wine business.

The move, according to Bill Newlands, CEO and chairman of Constellation Brands, will allow the company to focus on its high-end brands that he says perform better in a statement confirming the deal on Wednesday.

“One of the hallmarks of our success over the years has been our ability to evolve and stay ahead of emerging consumer trends,” said Newlands.

“This decision will help strengthen the organizational focus on a more upscale set of wine and spirits brands that will better position our business to drive accelerated growth and shareholder value. In turn, Gallo acquires a collection of top brands that complement their operating model and business strategy to deliver quality products to consumers at all prices.

Constellation’s remaining wine and spirits portfolio includes: Robert Mondavi; The Compagnie des Vins de Prisonniers; Kim Crawford; Ruffino; Meiomi; and SVEDKA Vodka, as well as premium brands like Schrader Cellars, Mount Veeder Winery, Casa Noble Tequila, and High West Whiskey, among others.

The deal follows Constellation’s additional investment of nearly $ 4 billion in Canadian cannabis company Canopy Growth last year, bringing its stake to 38%. The company acquired its initial stake in October last year for £ 141million (US $ 179million), at the time, according to the the Wall Street newspaper, Canopy Growth had a market value of £ 1.3 billion (US $ 1.6 billion).

The transaction is subject to closing conditions and regulatory approval, and is expected to close at the end of the first quarter of fiscal 2020.

See below for the full list of brands sold at Gallo:

  • Arbor mist
  • Black Box
  • black stone
  • Blufeld
  • Corsair
  • Clos du Bois
  • To cook
  • Cribari Tables & Desserts
  • Diseño
  • Estancia
  • Franciscan
  • Hidden crush
  • Hogue cellars
  • J Roget
  • The earth
  • Manischewitz
  • Marc West
  • Milestone
  • Paul Masson Grande Amber Brandies
  • Paul Masson wines
  • Primordial roots
  • Crow wood
  • Rex goliath
  • Richards Wild Rose of Ireland
  • simply naked
  • Taylor tables and desserts
  • Grilled head
  • V. No


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Elisha A. Tilghman

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