News Alert: Gallo Closes Mega-Deal With Constellation Brands Covering 30 Wine BrandsJanuary 5, 2021
It’s been a long time coming, but E.&J. Gallo has closed its acquisition of more than 30 wine brands and five wineries from Constellation Brands. The final price was approximately $810 million, consisting of approximately $560 million in cash paid at closing and up to $250 million in earnouts if brand performance targets are met over a two-year period after closing. The price also reflects adjustments of approximately $220 million related primarily to changes in inventory for which Constellation has already received the benefit.
The acquisition includes wine brands such as Arbor Mist, Black Box, Clos du Bois, Estancia, Franciscan, Hogue, Manischewitz, Mark West, Ravenswood, Taylor, Vendange, and Wild Horse that will join the Gallo portfolio. With the acquisition, Gallo will also expand its operational footprint with the addition of five wineries located in California, Washington, and New York, along with Constellation’s Polyphenolics business. Gallo is also acquiring the Nobilo New Zealand Sauvignon Blanc brand in a separate transaction with Constellation, for $130 million.
“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.
“The closing of this transaction represents our company’s long-term commitment to the wine industry,” said Gallo CEO Ernest J. Gallo, adding, “We are pleased to welcome the new employees joining the Gallo family.”
Under an FTC consent order, Gallo will also divest two of its legacy dessert brands, Fairbanks and Sheffield, to Precept Brands. Financials for that deal were not disclosed.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
Tagged : Constellation Brands, E.&J. Gallo
GET YOUR FIRST LOOK AT 2021 DATA AND 2022 PROJECTIONS FOR THE WINE AND SPIRITS INDUSTRIES. ORDER YOUR 2022 IMPACT DATABANK REPORTS. CLICK HERE.