Constellation Brands completes $885M purchase of Fortune Brands' wine unit

Constellation Brands completes $885M purchase of Fortune Brands' wine unit

Constellation Brands completes $885M purchase of Fortune Brands' wine unit


Constellation Brands Inc. said Monday it's completed the $885 million acquisition of Fortune Brands Inc.'s U.S. wine portfolio.

The purchase includes well-known Bay Area wines such as Clos du Bois, Gary Farrell and Geyser Peak, as well as five wineries and vineyards, and is reportedly the largest ever involving Sonoma County wineries.

Fairport, N.Y.-based Constellation Brands (NYSE: STZ) said it's "formulating an integration plan" for the acquired Beam Wine Estates assets and will announce details when the plan is finalized.

The purchase of Healdsburg-based Beam wines includes brands such as Clos du Bois, Geyser Peak, Wild Horse, Buena Vista Carneros and Gary Farrell, along with 1,500 acres of vineyards, five wineries and associated sales organizations. Last year, those brands sold 2.6 million cases, generating sales of $214 million. The bulk of that sales volume came from Clos du Bois, which sold 2 million cases.

In early November, Deerfield, Ill.-based Fortune Brands (NYSE: FO) and chairman and CEO Norm Wesley described the sale as an attempt to reap higher returns and "maximize shareholder value" for Fortune Brands, which will now focus more on the "higher return" premium spirits market. Fortune Brands acquired many of its wine brands just two years ago from Allied Domecq.

Fairport, N.Y.-based Constellation bought Robert Mondavi Corp. for more than $1.3 billion three years ago, and owns a host of well-known Bay Area wine brands, including Blackstone Winery, Franciscan Oakville, Mount Veeder Winery, Ravenswood, Robert Mondavi and Simi.

Beam Wine Estates has 543 employees at its division headquarters and individual wineries, according to a spokeswoman. Giant Constellation is the world's largest wine producer, according to the company, selling more than 250 brands in 150 countries and operating about 60 wineries, distilleries and distribution facilities. It acquired Robert Mondavi Corp. in late 2004 for about $1.36 billion, and later eliminated nearly 200 jobs at Mondavi.

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