Constellation Brands has completed its transaction with E. & J. Gallo Winery to divest a portion of its wine and spirits portfolio.
The deal, priced at approximately $810 million, also includes facilities located in California, New York, and Washington.
The transaction comprises approximately $560 million in cash, paid at closing, and the opportunity to receive up to $250 million in earnout payments upon achievement of brand performance targets over two years after closing, the company added.
In November 2019, both companies signed a consent order with the Bureau of Competition of the US Federal Trade Commission (FTC) regarding the transaction.
The spirits giant also closed its separate but related transaction with Gallo to divest the Nobilo wine brand and certain associated assets and liabilities for approximately $130 million.
This deal is subject to certain post-closing adjustments.
'Accelerated Revenue Growth'
Bill Newlands, Constellation Brands’ president and chief executive officer, said, “The closing of these deals positions our wine and spirits business for accelerated revenue growth and operating margin performance going forward.”
“We continue to see the staying power of consumer-driven premiumisation trends, and these moves align with our vision of building a winning portfolio of bold and distinctive higher-end brands. We are grateful for the dedication of our internal teams, and the support and collaboration from Gallo and our business partners to help us close these transactions and ensure as smooth a transition as possible.”
Elsewhere, the company also closed its transaction with Vie-Del Company to divest certain brands used in Constellation’s grape juice concentrate business, together with related inventory, interests in certain contracts, and liabilities.