Constellation Brands to Buy Fortune Brands' U.S. Wine Business
The business to be acquired includes some of California's most highly regarded wineries. The portfolio represents approximately 2.6 million cases.
14/11/07 Constellation Brands, Inc. and Fortune Brands, Inc. announced that they have entered into an agreement under which Constellation will acquire Fortune's U.S. wine business for $885 million, subject to post-closing adjustments. The transaction is expected to close by Dec. 31, 2007.
The business to be acquired includes some of California's most highly regarded wineries. The portfolio represents approximately 2.6 million cases. Brands being acquired include Clos du Bois, a leading super-premium wine, Geyser Peak and Wild Horse, a top luxury wine brand. More than 1,500 acres of vineyards in Napa, Sonoma and Carneros, Calif., are included in the purchase, in addition to five California wineries.
"This portfolio is an excellent fit and furthers our strategy of exceeding consumer expectations and expanding our presence in the growing high-end segments of the wine market," said Rob Sands, Constellation Brands president and chief executive officer. "We are delighted about the prospect of adding these wineries and brands to our existing portfolio, which will enhance our growing position in the U.S. premium wine business. As an example, Clos du Bois, a two million case brand, has a history of strong consumer brand equity, growth and profitability. We also look forward to working with the people who have been responsible for the tremendous success of these wines."
The company estimates that on a comparable basis this acquisition will be slightly accretive to diluted earnings per share for fiscal 2009 and modestly dilutive for fiscal 2008, assuming the transaction closes by Dec. 31, 2007. A plan for the integration of this acquisition into Constellation will be finalized after the close of the transaction, and the company will determine the best way to effectively assimilate the brands and facilities. The transaction will be financed with debt and is subject to customary and routine regulatory approvals and other closing conditions.
