Constellation, E. & J. Gallo Winery Close Deal

Gallo adding more than 30 wine, spirits brands to its portfolio
Photograph courtesy of E. & J. Gallo Winery

VICTOR, N.Y., and MODESTO, Calif. —Constellation Brands closed its transaction with E. & J. Gallo Winery to divest a portion of its wine and spirits portfolio priced at $11 retail and below. The $810 million deal includes related facilities located in California, New York and Washington state.

In a separate but related transaction, Constellation closed its agreement with Gallo to divest the Nobilo wine brand and related assets for about $130 million, subject to post-closing adjustments.

The moves are expected to accelerate Constellation’s wine and spirits business moving forward and allow the beverage company to focus its portfolio on consumer premiumization trends, it said.

“We continue to see the staying power of consumer-driven premiumization trends, and these moves align with our vision of building a winning portfolio of bold and distinctive higher-end brands,” Bill Newlands, Constellation’s president and CEO, said. “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.”

Constellation Brands’, Victor, N.Y., remaining collection of wine and spirits includes brands such as Robert Mondavi, The Prisoner Wine Co., Kim Crawford, Meiomi and SVEDKA Vodka.

E. & J. Gallo Winery, Modesto, Calif., will add more than 30 wine brands to its portfolio from Constellation including Arbor Mist, Black Box, Clos du Bois, Estancia, Franciscan, Hogue, Manischewitz, Mark West, Ravenswood, Taylor, Vendange and Wild Horse. It will also acquire the Nobilo New Zealand Sauvignon Blanc brand in a separate transaction.

"The closing of this transaction represents our company's long-term commitment to the wine industry," said CEO Ernest J. Gallo. "We are pleased to welcome the new employees joining the Gallo family." 

The deal, which was first announced in April 2019, was approved on Dec. 23 by the Federal Trade Commission (FTC). Gallo will divest in two of its legacy dessert brands, Fairbanks and Sheffield, to Precept Brands LLC, pursuant to the FTC consent order.

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