The brands covered are those principally priced at $11 and below in retail; and the divesture includes six related facilities in California, New York and Washington. The brands include Clos du Bois, Black Box, Estancia, Mark West, Wild Horse, Franciscan, and Ravenswood.
Constellation says the divestiture will allow it to concentrate on its more premium wine and spirits brands.
Premiumization
Bill Newlands, president and CEO, Constellation Brands, said: “This decision will help enhance organizational focus on a more premium set of wine and spirits brands that better position our company to drive accelerated growth and shareholder value.
“In turn, Gallo is acquiring a collection of great brands that complement their operational model and business strategy to provide quality products to consumers at every price point.”
Constellation’s remaining wine and spirits portfolio includes Robert Mondavi; The Prisoner Wine Company; Kim Crawford; Ruffino; Meiomi; and SVEDKA Vodka. It also has high-end brands such as SIMI, Schrader Cellars and Mount Veeder Winery wine brands; High West Whiskey and Casa Noble Tequila; and Cooper & Thief and Spoken Barrel. Its beer portfolio includes Corona and Modelo.
Gallo says the acquisitions will allow it to offer products at all price points. Joseph E. Gallo, chief executive officer, said: “While we continue to invest in our premium and luxury businesses, we see a tremendous opportunity with this acquisition to bring new consumers into the wine category.
“We will continue to provide our customers and consumers with quality products at every price point.”
The transaction is subject to the satisfaction of certain closing conditions, including regulatory approval, and is expected to close at the end of the company's first quarter of fiscal 2020.
