Modesto’s Gallo Winery won’t buy quite so many brands from fellow industry giant
Federal antitrust concerns have prompted E.&J. Gallo Winery of Modesto to downsize its pending purchase from Constellation Brands.
The deal went from $1.7 billion to $1.1 billion with Thursday’s announcement that it would not include a few brands of sparkling wine, dessert wine and brandy.
Gallo still would obtain numerous brands of still wine if the purchase, announced in April, closes as expected by March 1, 2020. The company also would get a total of six production facilities in California, Washington state and New York state.
“Both the Gallo and Constellation teams are committed to completing the transaction,” said Joseph E. Gallo, chief executive officer at Gallo, in a news release. “We see a tremendous opportunity with this acquisition to bring new consumers into the wine category and look forward to integrating these brands into our portfolio and welcoming the new employees to our family winery.”
The companies Thursday also announced the separate purchase by Gallo of the Nobilo brand of New Zealand wine from Constellation. Gallo will pay $130 million if the deal closes as expected in 2021.
Gallo, the world’s largest wine company, employs about 6,500 people in Modesto and other locations. The original purchase from Constellation, based in Canandaigua, N.Y., would have added about 700.
Constellation said in its own news release that the Federal Trade Commission raised “competitive concerns” about parts of the deal. Thus, it no longer will include Cook’s California Champagne, J. Roget American Champagne and Paul Masson Grande Amber Brandy. The revised deal will be reviewed by the FTC.
Gallo already has a wide offering of sparkling wine, brandy and other spirits to go along with still wines from the San Joaquin Valley, coastal California, Washington and a few foreign countries.
The revised deal with Constellation would provide Gallo with Turner Road Vintners in the Lodi area and Mission Bell Winery in Madera County. They mainly produce wines with the “California” appellation, which cost less to consumers than Napa and other premium sources.
Gallo would add Franciscan to its Napa portofilo; Ravenswood and Clos du Bois in Sonoma County; and Hidden Crush, Estancia and Wild Horse on the Central Coast. The purchase also involves Hogue Cellars in Washington, Blufeld from Germany and Diseno from Argentina.
Gallo would have its first-ever winery in New York, making the Taylor, Arbor Mist, Wild Irish Rose and Manischewitz brands. And it would get Cribari sacramental wines in Fresno.
This story was originally published December 13, 2019 at 11:29 AM.
