Constellation’s Mondavi Deal Is Finalized

A California wine country landmark changed hands Wednesday as shareholders of the Robert Mondavi Corp. approved a nearly $1.36-billion buyout by New York-based drinks giant Constellation Brands.

The deal was approved at a meeting in San Francisco with more than 80% of votes cast by Class A shareholders and 94% of votes cast by Class B shareholders in favor of selling.

Mondavi has faced tough competition from imports and inexpensive domestic brands such as California’s Charles Shaw, commonly known as Two Buck Chuck, because the brand typically sells for $1.99 a bottle. Mondavi had planned to try to revitalize the company by selling the luxury side of the business and refocusing on $15-and-under brands such as Woodbridge.

Those plans were upset when Constellation made an offer for the entire company, which was founded in 1966 by wine pioneer Robert Mondavi.

Mondavi’s board was cool to the initial offer of $970 million, but executives changed their minds after Constellation sweetened the deal.

Under terms of the agreement, Constellation is acquiring all the outstanding shares of Mondavi for $56.50 a share for Class A common stock -- a 3.2% premium to Mondavi’s closing price of $54.75 on Nasdaq before the deal was announced. Mondavi Class B shareholders will receive $65.82 a share. Constellation also will assume $325 million of Mondavi debt as part of the transaction.

Fairport, N.Y.-based Constellation imports Corona, Pacifico, Tsingtao and St. Pauli Girl beers and owns the Almaden, Inglenook and Blackstone wine labels.