Constellation Brands Inc. said Dec. 12 the company will revise the terms of the previously announced wine and spirits deal with E. & J. Gallo Winery Inc. to address competitive concerns raised by the U.S. Federal Trade Commission.
In April, the Corona brewer announced a deal to sell its portfolio of wine priced below $11 per bottle to privately held California-based E. & J. Gallo for $1.7 billion.
Under the revised terms of the transaction, Constellation Brands will not sell its Cook's California Champagne, J. Roget American Champagne and Paul Masson Grande Amber Brandy brands to E. & J. Gallo.
The deal price will be lowered to $1.1 billion, of which $250 million is an earnout if brand performance provisions are met over a two-year period after closing.
Constellation Brands said the company is exploring other options to divest the brands excluded from the transaction.
Separately, Constellation Brands will sell its New Zealand-based Nobilo Wine brand and related assets to E. & J. Gallo for $130 million. This transaction is expected to close in the first half of fiscal 2021, subject to the FTC and New Zealand regulatory approval.