Constellation, E. & J. Gallo Cut Deal Size to Address FTC Concerns

By Colin Kellaher

Constellation Brands Inc. (STZ) Thursday said it will sell fewer brands to E. & J. Gallo Winery in a revised deal aimed at addressing competitive concerns raised by the U.S. Federal Trade Commission.

The Victor, N.Y., beer and spirits company said its Cook's California Champagne, J. Roget American Champagne and Paul Masson Grande Amber Brandy brands will be excluded from the deal, with the transaction price reduced to about $1.1 billion from $1.7 billion.

The new purchase price includes a $250 million earnout based on brand performance in the first two years.

Constellation in April said it agreed to sell about 30 brands, most of which sell for $11 or less at stores, to Gallo, along with related facilities in California, New York, and Washington.

However, the FTC raised competitive concerns about the deal in the sparkling wine, brandy, dessert wine and concentrate categories.

Constellation said it expects to complete the revised transaction by the end of fiscal 2020, subject to FTC review and approval.

Write to Colin Kellaher at [e-mail]

(END) Dow Jones Newswires

December 12, 2019 09:37 ET (14:37 GMT)

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