Constellation Brands expects blockbuster deal with Gallo to close in June
Constellation Brands Inc.’s $1.1 billion sale of its low-price wine and spirits brands to ?E. & J. Gallo Winery is expected to be completed by the end of June and should not be scuttled by the coronavirus pandemic.
“Both companies remain fully committed to finalizing this transaction,” said Garth Hankison, chief financial officer for Victor, New York-based Constellation, the third-largest wine company in the United States that owns local wineries such as Simi Winery in Healdsburg and Robert Mondavi Winery in Napa.
As part of the deal, Constellation will sell the Clos du Bois winery in Geyserville and the Ravenswood and Mark West brands.
The company on Friday reported fourth-quarter net income of $398.4 million, compared with $1.24 billion during the same quarter a year ago. Its wine and spirits division had a 1% increase in sales for the quarter compared with a year ago, reporting $715 million in net sales for the first three months of 2020.
In response to panic-buying over COVID-19, the company has seen 23% sales growth for its wine and spirits core brands at supermarkets and large retailers over the past four weeks, CEO Bill Newlands said.