Constellation Brands today announced an agreement to sell approximately 30 brands from its wine and spirits portfolio, principally priced at $11 retail and below, to E.&J. Gallo for $1.7 billion.
The deal also includes related facilities located in California, New York and Washington.
The transaction is subject to the satisfaction of certain closing conditions, including the receipt of regulatory approval, and is expected to close at the end of the company’s first quarter of fiscal 2020.
The company said that the decision better aligns its portfolio with consumer premiumization trends.
“One of the hallmarks of our success over the years has been our ability to evolve and stay on the forefront of emerging consumer trends,” says Bill Newlands, Constellation Brands president and CEO. “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.”
Brands in the deal include Black Box, Clos du Bois, Ravenswood, Mark West, Wild Horse and Estancia.