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Gallo-Constellation Deal Inches Forward

November 9, 2020

Constellation Brands’ and E.&J. Gallo Winery’s proposed $1 billion deal, shifting a number of brands from the former company to the latter, has taken another step forward. This morning, Constellation announced that both companies have signed an FTC Agreement Containing Consent Order that, if accepted by the government, will allow the deal to close in the fiscal fourth quarter of 2021. The review process typically takes anywhere from 30 to 45 days.

The deal, in its current form, would shift a number of brands priced at or below $11, including Clos du Bois, Black Box, and Mark West, among others, from Constellation to Gallo and contains a $250 million earnout if performance goals are met within two years of the deal closing. In addition, Constellation announced that it expects two other substantial sales to finalize by the end of fiscal 2021 (which ends next February): its $130 million sale of Nobilo—also to E.&J. Gallo—and its $255 million sale of Paul Masson Grande Amber Brandy to Sazerac.—Shane English

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