Diageo splashes US$1bn on Casamigos Tequila
Diageo has agreed to acquire George Clooney’s Casamigos Tequila brand for US$1 billion, increasing the spirits giant’s presence in the fast-growing super-premium category.
Diageo will initially pay US$700m for the brand and will potentially pay a further US$300m depending on Casamigos’s performance over the next 10 years.
The transaction is expected to close in the second half of the 2017 calendar year, subject to regulatory clearances. Diageo expects the acquisition will be earnings per share (EPS) neutral for the first three years, and will be profitable in the fourth full fiscal year post-completion (2021).
Casamigos is the fourth brand in Diageo’s Tequila portfolio, which also includes Don Julio, DeLeón, and Peligroso. Diageo completed it full acquisition of Don Julio in 2015, giving co-owner Jose Cuervo its Bushmills Irish whiskey brand in return.
Diageo will focus on expanding the presence of Casamigos in both its key US market and internationally. The group said Casamigos will “play a complementary role alongside Don Julio”.
“We are delighted to announce this transaction today to extend our participation in the Tequila category,” said Ivan Menezes, CEO of Diageo.
“It supports our strategy to focus on the high growth super-premium and above segments of the category. With the global strength of Diageo we expect to expand the reach of Casamigos to markets beyond the US to capitalise on the significant international potential of the brand.
“We look forward to building on the remarkable success of Casamigos to date.”
Casamigos was founded in 2013 by actor George Clooney, Rande Gerber and Mike Meldman. It sold 120,000 cases in 2016 and is on track to reach over 170,000 cases by the end of 2017.
Diageo confirmed that the founders of Casamigos will have “continued involvement and active participation” in the future of the brand.