Benzinga | Nov 9, 2020 09:22AM EST

Constellation Brands, E. & J. Gallo Sign Deal With FTC Staff Related To Consent Order On Pending Deal

Constellation Brands, Inc. (NYSE:STZ), a leading beverage alcohol company, announced today that it and E. & J. Gallo Winery have signed an Agreement Containing Consent Order with the Bureau of Competition of the U.S. Federal Trade Commission (FTC) regarding Gallo's pending acquisition of 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 proposed consent order marks the final stages in the FTC review process and remains subject to review and approval by the FTC Commissioners, who typically provide their final review within 30 to 45 days. Therefore, Constellation anticipates closing in the fourth quarter of fiscal 2021.

The proposed consent order, if accepted by the FTC Commissioners, would allow Constellation and Gallo to complete the sale under the terms of the Second Amended and Restated Asset Purchase Agreement announced in May 2020. As set forth in the May 2020 agreement the transaction price is approximately $1.03 billion, subject to closing adjustments, of which $250 million is an earnout if brand performance provisions are met over a two-year period after closing. Constellation also expects to close its separate but related transactions with Gallo to divest the New Zealand-based Nobilo Wine brand and related assets for $130 million and with Sazerac to divest the Paul Masson Grande Amber Brandy brand, related inventory and interests in certain contracts for approximately $255 million by the end of the fourth quarter of fiscal 2021, subject to FTC acceptance of the proposed consent order.