Robert Mondavi Going Once, Going Twice...Sold to Constellation

of Oakville for more than a billion dollars, saving Napa Valley's best-known winery from its own draconian plan to split in two and sell off its luxury brands piecemeal."

The deal will keep all Robert Mondavi brands -- from the $5 Woodbridge by Robert Mondavi to the $125 Robert Mondavi Cabernet Sauvignon Reserve -- under the same roof instead of splitting them among multiple owners.

Mondavi Corp.'s board of directors, including two Mondavi family members, voted unanimously Wednesday to accept Constellation's offer for $1.03 billion in cash and $325 million in assumed debt, a 3 percent increase from the $970 million offer the Fairport, N.Y., giant made on Oct. 19.

Constellation "has enormous clout globally, and I think will do a lot to build the Mondavi business," said consultant Jon Fredrickson of Gomberg, Fredrickson & Assoc. of Woodside.

The billion-dollar offer also significantly exceeded the $749 million to $939 million in equity value Mondavi Corp. executives had said they could achieve with their restructuring plan, which was announced in September.

The acquisition further consolidates Constellation's position as the largest global wine company, boosting its annual production to 80 million cases from 70 million. The next largest producer, E&J Gallo Winery of Modesto, sells about 70 million cases.

It also hands Constellation Napa's plum property -- "the most respected international brand of any size," in Fredrickson's words.

Mondavi Corp. has been hurt by mismanagement and family squabbles for years, but Fredrickson said he believes "Constellation will do wonders for the Mondavi business," with its savvy management and international distribution network.

Robert Mondavi, 91, whose evangelistic fervor and focus on quality put California -- especially Napa Valley -- on the world wine map, has agreed to remain an ambassador for the brand and to vote his shares in favor of the deal. He will keep his office at the company's popular tasting room and headquarters on Highway 29 in Oakville.

Two of his three children, Marcia Mondavi Borger and Timothy Mondavi, are company directors and voted to approve Constellation's bid.

Mondavi Corp. was founded by Robert Mondavi and his eldest son Michael in 1966, a time when Napa was best known as the home of what was then the Napa County Sanitarium. The Mondavis no longer will own any of the company by the end of this year or early in the next.

"I am sad," said Timothy Mondavi, his voice unsteady in a telephone interview Wednesday.

"Wearing my shareholder hat, this is a good day. Wearing my family hat, it's a sad day," he said. "We are a public company, and my family has always committed to honor all of our shareholders, and we are doing that."

As for his father, he said, "I think he's very saddened that the legacy is in an unclear situation. But I will say that it is my commitment, and the commitment of my father and sister and brother, that the Robert Mondavi Winery legacy will continue" in the form of one or more new family-owned wineries.

Timothy Mondavi is consulting winemaker to Mondavi Corp., but he said no decision has been made as to whether he will continue in that role.

Until just a few years ago, Constellation was known as Canandaigua and peddled mostly low-end wines such as Inglenook and Almaden.

But under Constellation chairman Richard Sands, who inherited the company from his father, it has become known as a respectful steward of other premium acquisitions such as Franciscan Oakville Estates, Mount Veeder, Simi and Ravenswood in California and Australia's BRL Hardy and Blackstone.

Constellation is part of a three-way joint venture that is trying to buy Napa-based Chalone Wine Group, owner of Acacia and other brands.

Sands said upon announcing his bid last month that he might reverse the layoffs of more than 300 people announced by Mondavi. But in a telephone interview Wednesday he said it was too early to discuss staffing plans.

Mondavi chairman Ted Hall and chief executive Greg Evans seemed to give little heed to Constellation's advances last month, saying they would consider the New York company's bid along with other opportunities.

But they met with Sands last week and put together a deal in unusually short order.

Sands had urged Mondavi Corp. executives to halt the restructuring, especially a downsizing of the luxury Robert Mondavi Winery, until his bid was fully considered.

"They have not done anything to date that we feel in anyway impairs the value," Sands said Wednesday. "From this point forward, we'll work together to enhance the prestige of the flagship brand."