Constellation, E. & J. Gallo Cut Deal Size to Address FTC Concerns
December 12 2019 - 9:52AM
Dow Jones News
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 colin.kellaher@wsj.com
(END) Dow Jones Newswires
December 12, 2019 09:37 ET (14:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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