It seems that Constellation Brands and Ruffino have worked out their differences, as Constellation announced this morning that it has purchased the remaining 50.1% of Ruffino for approximately $69 million, making it the sole owner of Ruffino. As part of the transaction, Constellation will assume about $73 million in debt.
You may recall that Constellation and Ruffino were engaged in a legal battle in the US. It first began when Constellation notified Ruffino that it was terminating its importation agreement for an alleged breach of contract right around the time that the Folonari family attempted to exercise options to sell its stake in Ruffino to Constellation for as much as $71 million. Note that a minority shareholder had already exercised its options to sell its 9.9% stake to Constellation in 2010 for about $34 million, bringing Constellation's stake to 49.9%.
But that's all history now as Constellation has since included the Ruffino brand in its 19 "focus brands." Recall that they recently launched a Ruffino Prosecco to jump on that popular and growing trend. According to SymphonyIRI data for the last 52 weeks, Ruffino grew about 8% in dollar sales in the U.S. Ruffino's year-to-date global sales are growing at 9%.
Ruffino produces about 1.3 million cases of wine a year, with about 50% of its sales taking place in the US. Constellation named Sandro Sartor to be the general manager of Ruffino, effective November 1. He will report to Greg Fowler, Constellation's senior vice president, operations. Most recently, Sartor served as managing director and general manager for Diageo Italia S.p.A. With it, Constellation gains an additional 130 employees and now fully owns the brand and production facility located near Florence. The wines continue to be produced at the same place they always have - the Tuscan Estates of Ruffino.
"We intend to build on the history of the Folonari family and the image and reputation they brought to the brand for today's wine consumers who enjoy Tuscan style wines," said chief Rob Sands.
Stay tuned for more news this afternoon....
Until later, Megan
"Success is having to worry about every damn thing in the world, except money."
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