Constellation Brands, Inc. (NYSE: STZ and STZ.B), a leading
beverage alcohol company, announced today that it has closed its
transaction with E. & J. Gallo Winery to divest a portion of
Constellation’s wine and spirits portfolio principally priced at
$11 retail and below, including certain related facilities located
in California, New York, and Washington state. The aggregate
transaction price was approximately $810 million, consisting of
approximately $560 million in cash paid at closing and the
opportunity to receive up to $250 million in earnout payments if
brand performance targets are met over a two-year period after
closing. The transaction price reflects various adjustments of
approximately $220 million related primarily to changes in
inventory for which Constellation has already received the benefit.
Constellation also closed its separate but related transaction
with Gallo to divest the Nobilo wine brand and certain related
assets and liabilities for approximately $130 million, subject to
certain post-closing adjustments.
“The closing of these deals positions our wine and spirits
business for accelerated revenue growth and operating margin
performance going forward,” said Bill Newlands, Constellation
Brands’ president and chief executive officer. “We continue to see
the staying power of consumer-driven premiumization trends, and
these moves align with our vision of building a winning portfolio
of bold and distinctive higher-end brands. We are grateful for the
dedication of our internal teams, and the support and collaboration
from Gallo and our business partners to help us close these
transactions and ensure as smooth a transition as possible.”
Separately, Constellation has also closed its transaction with
Vie-Del Company to divest certain brands used in Constellation’s
grape juice concentrate business, together with related inventory,
interests in certain contracts, and liabilities. Constellation’s
agreement with Sazerac to divest the Paul Masson Grande Amber
Brandy brand, related inventory, and interests in certain contracts
for approximately $255 million, subject to certain closing and
post-closing adjustments, has been authorized by the Federal Trade
Commission and is expected to close in January 2021.
Constellation’s remaining wine and spirits portfolio represents
a collection of powerhouse brands such as the iconic Robert Mondavi
brand family, The Prisoner Wine Company brand family, Kim Crawford
- the #1 sauvignon blanc in the U.S. market, Meiomi - the #1 pinot
noir in the U.S., and SVEDKA Vodka - the #1 imported vodka in the
U.S. The company’s portfolio also includes a collection of
highly-rated, higher-end brands such as SIMI, Schrader Cellars,
Mount Veeder Winery, High West Whiskey, and Casa Noble Tequila, as
well as premium wine innovations such as Unshackled, High West
barrel finished cocktails, Meiomi Cabernet Sauvignon, and Kim
Crawford Illuminate.
FORWARD-LOOKING STATEMENTSThis news release
contains forward-looking statements. All statements other than
statements of historical fact are forward-looking statements. The
word “expect” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. These statements may
relate to business strategy, future operations, future revenue
growth, future operating margin performance, prospects, plans, and
objectives of management, as well as information concerning
expected actions of third parties. All forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those set forth in, or implied by, such
forward-looking statements.
The forward-looking statements are based on management's current
expectations and should not be construed in any manner as a
guarantee that such results will in fact occur or will occur on any
contemplated timetable. All forward-looking statements speak only
as of the date of this news release and Constellation Brands
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. There can be no assurance that Constellation Brands
will receive any earnout (contingent consideration) from its
recently completed Wine and Spirits Transaction with E. & J.
Gallo Winery. The pending Paul Masson Grande Amber Brandy
transaction with Sazerac Investments, LLC is subject to closing
conditions. There can be no assurance the Paul Masson Grande Amber
Brandy transaction will occur or will occur on the terms,
conditions or timetable contemplated hereby or that Constellation
will receive any specific amount of proceeds from that
transaction.
In addition to risks and uncertainties associated with ordinary
business operations, the forward-looking statements contained in
this news release are subject to other risks and uncertainties,
including completion of the Paul Masson Grande Amber Brandy
transaction; actual purchase price adjustments and other actual
post-closing adjustments; the actual market performance of brands
included in the contingent consideration payment opportunity; the
accuracy of all projections; and other factors and uncertainties
disclosed from time-to-time in Constellation Brands’ filings with
the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the fiscal year ended February 29, 2020, which
could cause actual future performance to differ from current
expectations.
ABOUT CONSTELLATION BRANDSAt Constellation
Brands (NYSE: STZ and STZ.B), our mission is to build brands that
people love because we believe sharing a toast, unwinding after a
day, celebrating milestones, and helping people connect, are Worth
Reaching For. It’s worth our dedication, hard work, and the bold
calculated risks we take to deliver more for our consumers, trade
partners, shareholders, and communities in which we live and work.
It’s what has made us one of the fastest-growing large CPG
companies in the U.S. at retail, and it drives our pursuit to
deliver what’s next.
Today, we are a leading international producer and marketer of
beer, wine, and spirits with operations in the U.S., Mexico, New
Zealand, and Italy. Every day, people reach for our high-end,
iconic imported beer brands such as Corona Extra, Corona Light,
Corona Premier, Modelo Especial, Modelo Negra, and Pacifico, and
our high-quality premium wine and spirits brands, including the
Robert Mondavi Brand Family, Kim Crawford, Meiomi, The Prisoner
Brand Family, SVEDKA Vodka, Casa Noble Tequila, and High West
Whiskey.
But we won’t stop here. Our visionary leadership team and
passionate employees from barrel room to boardroom are reaching for
the next level, to explore the boundaries of the beverage alcohol
industry and beyond. Join us in discovering what’s Worth Reaching
For.
To learn more, follow us on Twitter @cbrands and visit
www.cbrands.com.
MEDIA CONTACTS |
INVESTOR RELATIONS CONTACTS |
Mike McGrew 773-251-4934 /
michael.mcgrew@cbrands.comAmy Martin 585-678-7141 /
amy.martin@cbrands.com |
Patty Yahn-Urlaub 585-678-7483 /
patty.yahn-urlaub@cbrands.comMarisa Pepelea 312-741-2316 /
marisa.pepelea@cbrands.com |
A downloadable PDF copy of this news release can be found
here: http://ml.globenewswire.com/Resource/Download/4cb8e45d-3c2b-4c27-a2c1-7f3371b520f1
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