As part of the transaction, which pending regulatory approval is expected to close by year's end, Deerfield, Ill.-based Fortune Brands will hand over roughly 2.6 million cases of wine, 1,500 acres of Napa, Sonoma and Carneros, Calif., vineyards and five California wineries.
Push for premium
Constellation's most recent acquisition is expected to help the Fairport, N.Y., wine giant gain a stronger foothold it the high-end segment of the wine market. "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," Robert Sands, who this summer took over as president-CEO of Constellation, said in a statement.
Earlier this year Constellation -- which is home to more than 250 brands including Ravenswood and Robert Mondavi and also has some U.S. import rights for Corona beer -- expanded its spirits portfolio with its $380 million-plus purchase of Svedka vodka.
Unloading the wine business will allow the estimated $8 billion Fortune Brands to concentrate on its higher-return premium-spirits business, rather than the "lower margin" and "more capital intensive" wine business, Norm Wesley, chairman-CEO of Fortune Brands, noted in a separate statement.
Major spirit brands currently at Fortune include Jim Beam and Maker's Mark bourbons, Sauza tequila, Canadian Club whisky, Courvoisier cognac, DeKuyper cordials, Starbucks liqueurs and Laphroaig single-malt Scotch.
Following the deal, analysts speculated that Fortune's sale of its U.S. wine business would arm the company with cash to purchase Absolut vodka's parent, Vin & Sprit of Sweden.