Diageo To Sell 19 Brands To US-Based Sazerac For $550m
Diageo Plc is selling 19 spirits brands, including Seagrams VO whisky and cinnamon schnapps Goldschlager, to U.S.-based company Sazerac for $550 million as it looks to focus on premium brands.
Sky News reported in May that the world's largest spirits company was in talks to sell some US-focused brands for overall price tag of between $500 million and $1 billion.
Diageo, the British maker of Johnnie Walker Scotch and Smirnoff vodka said, said on Monday it would return the net proceeds of about £340 million pounds to shareholders through a share repurchase.
Earnings Per Share
The sale, which also includes whisky brands such as Seagram's 83, Seagram's Five Star and Myers's rum, will reduce Diageo's pre-exceptional earnings per share by 1.9 pence per share in the first full financial year after closing.
Diageo said it expects the sale to bring in a one-time gain of roughly £110 million. The company has also agreed to long-term supply contracts with Louisiana, U.S.-based Sazerac.