Fortune Brands, Inc. (NYSE: FO) today completed the previously announced sale of its U.S. wine business to Constellation Brands (NYSE: STZ). The price was $885million. Coupled with the sale earlier this year of two wine brands to E. & J. Gallo Winery, Fortune Brands has realized total consideration for its wine unit well in excess of $900 million.
“The sale of our wine business will help us drive shareholder value in a couple of meaningful ways,” said Norm Wesley, chairman and chief executive officer of Fortune Brands. “It will help enhance the
already high returns in our premium spirits business, which is the segment that generates our largest profit. Naturally, it will also increase our financial flexibility to focus resources on value-creating opportunities.”
The wine brands in the transaction with Constellation - which include Clos du Bois, Geyser Peak, Wild Horse, Buena Vista Carneros and Gary Farrell - had sales in 2006 of 2.6 million 9-liter cases and revenues of $214 million including excise taxes. In addition to the wine brands, the transaction also included the associated vineyards,
winemaking assets and sales organization. The previous transaction with Gallo included the William Hill and Canyon Road wine brands and related assets.
Fortune Brands was advised on the transaction by Citi and Credit Suisse as financial advisors and Pillsbury Winthrop Shaw Pittman as legal advisor.
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