The Federal Trade Commission (FTC) recently approved an $810 million amended agreement between Constellation Brands and E.J. Gallo for the sale of more than 30 brands priced at no less than $11 per unit to Gallo and related equipment located in California, New York and Washington, D.C., and related brewing equipment.
Image courtesy of: WineHub
The plan for this deal between Constellation and Garou first emerged in October 2018 and was officially announced in April 2019, when the deal was valued at $1.7 billion. The U.S. Federal Trade Commission intervened in the deal several times out of concern that a single group was monopolizing too many brands, and finally approved the merger agreement between the two groups on December 23, 2020.
Founded in 1933 by Ernest Gallo and Julio Gallo, the Gallo Group was already the world"s largest wine producer prior to this transaction, with a range of high, mid and low end wines exported to over 110 countries worldwide. After the deal with Constellation, Gallo will expand its portfolio of wine brands to include Arbor Mist, Clos du Bois, Estancia, Hogue, Manischewitz, Mark West, Ravenswood, Taylor, Vendange and Wild Horse. greatly facilitate its expansion to different tiers of consumers.
The transaction is also an important part of Constellation's downsizing program in recent years, accelerating its concentration on premium, headline brands, which now include Robert Mondavi, The Prisoner Wine, Kim Crawford, Meiomi and SVEDKA Vodka are some of the best-known brands in the market.
We will see the continued, strong impact of our consumer-driven premium brands, and this transaction is consistent with our growth objectives to build a stronger, more recognizable portfolio of brands," said Bill Newlands, president of Constellation Group, "Thanks to the dedication of our team, the support and collaboration of the Garrow Group, and the help of our partners, we were able to The transaction was completed smoothly and quickly.
According to The Democrat-Gazette, Gallo Group now holds about 30 percent of the wine produced in California. This transaction represents our company's continued expansion into the wine industry," said Gallo CEO Ernest J. Gallo Jr.
For consumers, the impact of the two groups may not be felt in the short term, but as one of the largest deals in the history of the U.S. wine industry, it is historically significant and has far-reaching implications for mergers and acquisitions between large conglomerates in the wine industry.