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George Clooney, Partners Sell Tequila To Diageo For $1 Billion

Published on Jun 22 2017 8:33 AM in Drinks tagged: Trending Posts / Diageo / Tequila / George Clooney

George Clooney, Partners Sell Tequila To Diageo For $1 Billion

Diageo Plc has agreed to acquire fast-growing U.S. tequila brand Casamigos, paying as much as $1 billion for a business co-founded four years ago by the actor George Clooney.

The deal expands the London-based distiller’s lineup in a fast-growing category, where it already owns the Don Julio, DeLeon and Peligroso brands. An initial consideration of $700 million will be followed by a further potential $300 million based on a performance-linked earn-out over 10 years, Diageo said in a statement Wednesday.

The deal will be Diageo’s biggest since its $3.2 billion acquisition of United Spirits Ltd. in 2014. It will be funded through a combination of cash and debt, and Diageo expects the deal to have limited impact on earnings per share for the first three years and to be accretive thereafter. Diageo said the purchase should close in the second half.

Growth Potential

“The price looks high,” Trevor Stirling, an analyst at Sanford C. Bernstein said by phone. “So much of this depends on their belief in the growth rate of this brand.”

Casamigos was founded in 2013 by Clooney along with developer Mike Meldman and entertainment entrepreneur Rande Gerber, who’s married to model Cindy Crawford.

Diageo and its rivals have been expanding their lineups of tequila and similarly tasting mezcal. Pernod Ricard SA this month agreed to acquire the Del Maguey brand, following a distribution distribution agreement by Diageo with Mezcal Union signed in February 2016.

The purchase “supports our strategy to focus on the high growth super-premium and above segments of the category,” Diageo Chief Executive Officer Ivan Menezes said in the statement. “With the global strength of Diageo we expect to expand the reach of Casamigos to markets beyond the U.S. to capitalize on the significant international potential of the brand.” [Picture: WikimediaCommons/Michael Vlasaty]

News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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