Constellation Brands announced on Monday 12 November that it plans to buy the American wine business of rival Fortune Brands for $885 million. Analysts say it is a move to expand the company''''s portfolio of high-end California wines.
Expected to close by 31 December, the acquisition will bring Constellation annual sales of 2.6 million cases of wine under brands like Clos du Bois, Geyser Peak and Wild Horse, more than 1,500 acres of vineyards in Napa, Sonoma and Carneros - all in California, and five wineries.
Constellation''''s California brands include Robert Mondavi, Ravenswood and Simi. The company said it would also consolidate parts of its Australian Hardy Wine business. Australia has seen severe droughts recently.
But, even with this latest acquisition, Constellation will control less than 5 per cent of the global wine market. However, its share of the American wine market will go up by one per cent, to around 20 per cent. The beer, wine and spirits major has been acquiring alcoholic-beverage businesses since the 1980s.