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, according to Shanken News Daily, a sister publication of Wine Spectator.
The deal has been in the works for more than a year, held up as the companies worked with the Federal Trade Commission (FTC) to tweak it to win approval. The delay left some brands in limbo.
The sale is part of Constellation's effort to focus more on premium wine brands. Gallo sees potential in the value-oriented wine brands. The deal includes 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 winemaking footprint with the addition of five wineries located in California, Washington, and New York. Gallo is also acquiring the Nobilo New Zealand Sauvignon Blanc brand in a separate transaction with Constellation, for $130 million.
For more on the sale and what executives at both companies hope to accomplish, check out the full story at Shanken News Daily.