Constellation to sell 30 of its wine and spirit brands to Gallo in $1.7bn deal

US drinks giant Constellation Brands is to sell some 30 of its wine and spirit brands to E&J Gallo, enabling it to focus on its premium range.  

Constellation is said to have been looking into the sale of its portfolio retailing at below $11 since last year. Brands included in the sell off which Gallo are paying $1.7bn for will include Clos du Bois, Black Box, Mark West, Wild Horse, Franciscan, Ravenswood and Estancia. This will allow Constellation to concentrate its energies on premium brands including Kim Crawfofd, Ruffino, Mondavi and Schrader.  

“This decision will help enhance organizational focus on a more premium set of wine and spirits brands that better position our company,” said Constellation president and CEO Bill Newlands. "In turn, Gallo is acquiring a collection of great brands that complement their operational model and business strategy to provide quality products to consumers at every price point.”    

Gallo’s said its strategy is to attract new customers with lower priced wines. “While we continue to invest in our premium and luxury businesses, we see a tremendous opportunity with this acquisition to bring new consumers into the wine category,” said Gallo’s CEO Joseph Gallo.    

The deal is subject to regulatory approval, and is expected to complete in the company’s first financial quarter ending in May.