Diageo Plc has agreed to buy George Clooney’s high-end tequila brand Casamigos in a deal valuing it at up to US$1 billion, as the world’s largest spirits maker seeks to boost its presence in a high-growth market, Reuters reports.
Diageo said on Wednesday it would pay US$700 million initially for the company, co-founded by the American actor, with potential payment of a further US$300 million linked to performance over 10 years.
The deal comes two weeks after Pernod Ricard took a stake in mezcal maker Del Maguey, and highlights the opportunity companies see in Mexico’s native spirits.
A new spate of high-end tequilas has helped the drink transcend its traditional image as a party beverage for young drinkers. Its sales rose 5.2 percent globally last year, according to data tracker IWSR, outperforming a spirits industry that edged up only 0.3 percent.
Casamigos, which means “house of friends,” was founded in 2013 by Clooney and his friends — nightlife entrepreneur Rande Gerber, who is married to model Cindy Crawford, and real estate developer Mike Meldman. They will continue to promote the brand.
Diageo, which has arrangements with other celebrities including David Beckham and Sean Combs, said Casamigos will be neutral to earnings for the first three years and add to earnings thereafter.
The brand sold 120,000 nine-liter cases in 2016, primarily in the United States, and is on track to reach over 170,000 by the end of the year. Diageo said expanding the brand to Europe would be a source of future growth.
The Casamigos deal is expected to close in second half of the year.
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