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Constellation Brands, E & J Gallo ink regulatory agreement to allow $1.03B wine, spirits deal

Brands in the sale deal with Gallo

These were the brands included in the current agreement. Names in bold have had a North Coast nexus in their history.

Arbor Mist

Black Box

Blackstone

Blufeld

Capri

Clos du Bois

Cribari Tables & Desserts

Diseño

Estancia

Franciscan

Hidden Crush

Hogue Cellars

Le Terre

Manischewitz

Mark West

Milestone

Paul Masson Wines

Primal Roots

Ravenswood

Rex Goliath

Richards Wild Irish Rose

Simply Naked

Taylor Tables & Desserts

Toasted Head

V. No

Vendange

Wild Horse

Source: Constellation Brands

Constellation Brands, Inc. (NYSE: STZ), announced Monday that it and E. & J. Gallo Winery have signed an agreement with federal regulators that may bring to a close a deal the two beverage alcohol giants started 18 months ago to transfer certain lower-priced wine and spirits brands, as Constellation focuses on higher-priced items.

The proposed consent order with the Federal Trade Commission’s Bureau of Competition would be among the final stages for the deal, which the two companies first inked in April 2019 and then amended twice after regulatory concerns. The move is part of Constellation’s shift to focus on upscale wine brands such as Simi, The Prisoner and Robert Mondavi from the North Coast.

Typical review times for this phase of deals are 30 to 45 days, and Constellation expects resolution of the deal in its fiscal fourth quarter, which ends in February, the company said.

The deal focuses on brands that retail for $11 or less, including certain related facilities in California, New York and Washington state. Those brands includes several started in the North Coast and facilities in the region.

The sale started out with about 30 brands and a deal valued at $1.7 billion. After commission staff balked at too much concentration under Gallo the sparkling wine, brandy, dessert wine and concentrate categories, Constellation last December trimmed Cook’s California Champagne, J. Roget American Champagne and Paul Masson Grande Amber Brandy from the deal, leaving the deal value at $1.1 billion, including a $250 million performance provision.

In May of this year, Constellation excluded its Mission Bell winery and related assets, which are tied to those sparkling wines and brandy labels, cutting the total value of the deal to $1.03 billion with the same-sized performance earn-out.

Separate from the original Gallo deal but connected to the consent order, Constellation also expects to finish its fiscal year with the hand-off of its New Zealand-based Nobilo Wine brand to Gallo, a $130 million deal, and Paul Masson Grande Amber Brandy to Sazerac for $255 million.

Brands in the sale deal with Gallo

These were the brands included in the current agreement. Names in bold have had a North Coast nexus in their history.

Arbor Mist

Black Box

Blackstone

Blufeld

Capri

Clos du Bois

Cribari Tables & Desserts

Diseño

Estancia

Franciscan

Hidden Crush

Hogue Cellars

Le Terre

Manischewitz

Mark West

Milestone

Paul Masson Wines

Primal Roots

Ravenswood

Rex Goliath

Richards Wild Irish Rose

Simply Naked

Taylor Tables & Desserts

Toasted Head

V. No

Vendange

Wild Horse

Source: Constellation Brands

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