Constellation Brands and Robert Mondavi have announced they have signed the merger agreement which will see Constellation acquiring the entire Mondavi Corporation.
The Mondavi portfolio will remain intact: Constellation will take over not only the luxury brands that Mondavi first put up for sale, but also Woodbridge, La Famiglia and the other high volume brands that were not in the original offer.
Robert Mondavi himself has agreed to stay with the business as ambassador to the company and work out of his office in the company's flagship winery in Oakville, Napa.
Constellation chairman Richard Sands said he was particularly pleased the 91-year-old chairman emeritus would be staying on. He said Constellation understood 'the long, rich history' of the company and were committed to 'further enhancing' its prestige.
In an exclusive interview with decanter.com last week, Sands had said it would be 'a travesty' to split up Mondavi. In his statement after concluding the deal he said, 'This once-in- a-lifetime combination will preserve and enhance the heritage of both companies by producing outstanding wine for generations to come.'
The total value of the deal is approximately US$1.6bn. The parties expect it to be concluded by the end of this year or early in 2005.
The acquisition consolidates Constellation's position as the largest global wine company, boosting its annual production to 80m cases from 70m. The next largest producer, Gallo of Sonoma, sells about 70m cases. It is now the owner of some of the best vineyard land in Napa, one of the world's most famous wineries - the Mondavi headquarters in Oakville, and part owner of luxury brands such as Opus One.
Two of Robert's three children, Marcia Mondavi Borger and Tim Mondavi, are company directors and voted to approve Constellation's bid. Michael Mondavi resigned from board last month.
It is not known whether Tim will stay with the company.
Baroness Philippine de Rothschild, who owns 50% of Opus One, had no comment on the situation other than to say she was 'extremely attentive to the ongoing business.'
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