Constellation and Gallo deal receives official clearance

A revised US$810 million deal between Constellation Brands and E&J Gallo has been given approval by the US Federal Trade Commission (FTC).

The revised deal, believed to be worth some US$810m, sees Constellation divest a portion of its wine and spirits portfolio to E&J Gallo – over 30 brands – which includes those priced at US$11 and below per bottle.

Brands due to be sold to the California wine giant include Clos du Bois, Black Box, Estancia, Mark West, Wild Horse, Franciscan, and Ravenswood.

Constellation is also divesting related facilities in California, New York and Washington state. The deal is due to complete this week.

The FTC has also granted approval for a number of other deals that Constellation has announced in the past year.

These include the sale of its brandy label Paul Masson to Sazerac for US$255 million; the sale of its grape juice concentrate business, including the Mega Purple brand, to bulk grape juice supplier Vie-Del Company; and the separate sale of its New Zealand wine brand Nobilo and related assets to Gallo for US$130 million.

Constellation said in a statement that these deals would be “completed in close proximity to the close of Constellation’s larger transaction with Gallo”.

Rumours of a deal between Constellation and Galo first surfaced in October 2018. Officially announced in the following April, the deal was initially valued at US$1.7bn and included over 30 wine brands and six winemaking facilities. However, it has since been revised multiple times to comply with regulations.

Article updated to reflect final sale price of $810 million 06/01/20.

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