Actor George Clooney must be smiling all the way to the bank, while toasting his own brand with a tequila. The actor, who is co-founder of premium tequila brand Casamigos, is seeing through the acquisition of Casamigos by London-based distiller Diageo Plc for $1 billion.
Casamigos was co-founded four years ago by Clooney. The deal will expand Diageo's lineup in a fast growing category, where it already owns the Don Julio, DeLeon and Peligroso brands.
Bloomberg said in a report that the purchase will be Diageo's biggest since its $3.2-billion acquisition of disgraced liquor baron Vijay Mallya's United Spirits Ltd in 2014.
After that deal boosted its presence in India, the owner of the Smirnoff brand is moving to strengthen its US business, which has returned to growth after a difficult stretch following a slowdown in vodka sales. Meanwhile, tequila volumes in the U.S. more than doubled from 2002 through 2015, according to the Distilled Spirits Council, the Bloomberg report said.
Diageo's president for the North American market, Deirdre Mahlan, tweeted on Wednesday that Casamigos has ample potential to play a complementary role alongside Diageo's existing tequila portfolio. "We look forward to building on the remarkable success of Casamigos to date," he said.
An initial consideration of $700 million for Casamigos will be followed by a further potential $300 million based on a performance-linked earnout over 10 years, Diageo said in a statement on Wednesday.
Casamigos is on track to sell 170,000, 12-bottle cases this year, Deirdre Mahlan told Bloomberg on a call. The spirit, which is growing 40 percent to 50 percent annually, sells for $45 to $55.
Brands growing at such a pace are "notoriously challenging to value under traditional methods," Mahlan said.
