One of the largest acquisitions in wine-industry history closed Tuesday, as E. & J. Gallo Winery completed its $810 million purchase of about 30 wine labels from Constellation Brands Inc.
The deal, first announced in April 2019, was originally valued at $1.7 billion, but antitrust concerns by the Federal Trade Commission spurred a slimmed-down deal.
Constellation
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the third-largest wine producer in the U.S., essentially offloaded its lower-priced brands — primarily priced at $11 or below — so it could focus on its more premium labels. Gallo, the nation’s largest wine producer, ended up acquiring popular brands such as Clos du Bois, Ravenswood and Mark West.
“The closing of these deals positions our wine and spirits business for accelerated revenue growth and operating margin performance going forward,” Constellation Chief Executive Bill Newlands said in a statement. “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.”
Separately, Constellation said it has closed deals to sell part of its grape-juice concentrate business to Vie-Del Co., and to sell the Paul Masson brandy brand to Sazerac for about $255 million.
Constellation retained wine brands such as Kim Crawford and Meiomi, and also owns brands such as Corona beer and Svedka vodka.
Constellation, headquartered in upstate New York, has seen its shares rise around 18% over the past year.
