Constellation Brands has agreed to sell nearly 30 brands from its wine and spirits portfolio to E&J Gallo Winery for $1.7bn to accelerate growth and increase shareholder value.

The transaction includes six winemaking facilities in California, Washington and New York.

Subject to regulatory approval, the transaction is expected to close by the end of Q1 2020.

Constellation Brands president and CEO Bill Newlands said: “One of the hallmarks of our success over the years has been our ability to evolve and stay on the forefront of emerging consumer trends.

“We see a tremendous opportunity with this acquisition to bring new consumers into the wine category.”

“This decision will help enhance organisational focus on a more premium set of wine and spirits brands that better position our company to drive accelerated growth and shareholder value.”

Constellation Brands wine and spirits portfolio includes Robert Mondavi and The Prisoner Wine Company brands, as well as Kim Crawford, Ruffino, Meiomi and SVEDKA Vodka.

Following the deal, E&J Gallo will add brands such as Clos du Bois, Black Box, Estancia, Mark West, Wild Horse, Franciscan and Ravenswood to its collection.

E&J Gallo CEO Joseph Gallo said: “We are committed to remaining a family-owned company focused on growing the wine industry.

“While we continue to invest in our premium and luxury businesses, we see a tremendous opportunity with this acquisition to bring new consumers into the wine category. We will continue to provide our customers and consumers with quality products at every price point.”

E&J Gallo Winery was founded in 1933 by brothers Ernest and Julio Gallo in Modesto, California. It is claimed to be the world’s largest family-owned winery with more than 6,500 global employees.