Diageo to acquire super-premium tequila Casamigos

21 June 2017

 

Diageo to acquire super-premium tequila Casamigos

 

Diageo has entered into a definitive agreement to acquire Casamigos, the fastest growing super-premium tequila brand in the US.  This is an exciting opportunity for Diageo to strengthen its participation in the fast growing tequila category, as well as expand the brand internationally. The transaction values Casamigos at up to $1 billion, with initial consideration set at $700 million and a further potential $300 million based on a performance linked earn-out over 10 years, reflecting the brand's exceptional growth trajectory and upside potential.

 

Casamigos was created in 2013 by founders Rande Gerber, George Clooney and Mike Meldman. The essence of the brand, "made by friends for friends", is reflected in the name, Casamigos or 'house of friends'. Since inception Casamigos has received numerous awards and accolades from tequila experts, taste makers and influencers across the US.  Casamigos has an authentic brand identity with a smooth and accessible taste profile. The brand's quality and uniqueness has delivered impressive growth, reaching 120k cases in 2016, primarily in the US, and a CAGR of 54% in the last two years. The brand is on track to reach over 170k cases by the end of 2017.

 

To date, the founders have built a brand that has thrived under their organic approach in reaching and expanding their "house of friends", and they will continue to promote the brand and provide their leadership and vision. We are delighted that the founders will have continued involvement and active participation in the future success of Casamigos.  This, combined with the strengths of Diageo, will ensure the continued momentum of the brand in the US as well as realising the growth opportunity from international expansion.

 

The transaction is expected to close in the second half of calendar 2017, subject to regulatory clearances. Diageo expects the transaction will be EPS neutral for the first three years and accretive thereafter. We expect the acquisition will be economic profit positive in the fourth full fiscal year post-completion.

 

The acquisition will be funded through existing cash resources and debt.

                                                                                                       

Commenting today Ivan Menezes, Chief Executive of Diageo, said "We are delighted to announce this transaction today to extend our participation in the tequila category. 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."

 

Deirdre Mahlan, President Diageo North America, commented "I am excited by the opportunity to bring Casamigos into the Diageo portfolio which allows us to further penetrate this exciting and high growth category. We believe Casamigos will play a complementary role alongside Tequila Don Julio. We look forward to partnering with Rande, George and Mike to realise the full potential of the brand."

 

"We are extremely excited to team up with one of the largest, most respected spirits companies in the world," said Casamigos Tequila Co-founder, Rande Gerber.  "What started from a friendship and an idea to create the best tasting, smoothest tequila as our own house tequila to drink and share with friends, has quickly turned into the fastest growing super-premium tequila. Casamigos has always been brought to you by those who drink it and we look forward to continuing that, working alongside the expertise and global reach of Diageo. Now even more people will be able to enjoy and experience our love and passion for Casamigos."

 

ENDS

 

Enquiries:

 

Media relations:		Global
		Kirsty King	+44 (0)7855 808 959
		Dominic Redfearn	+44 (0)7971 977 759
		[email protected]	+44 (0)20 8978 2749
		US
		Zsoka McDonald	+12032294730
Investor relations:		Pier Falcione	+44 (0)7786 031 939
		Andy Ryan	+44 (0)7803 854 842
		[email protected]

 

About Diageo

Diageo is a global leader in beverage alcohol with an outstanding collection of brands including Johnnie Walker, Crown Royal, JεB, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.

 

Diageo is a global company, and our products are sold in more than 180 countries around the world. The company is listed on both the London Stock Exchange (DGE) and the New York Stock Exchange (DEO). For more information about Diageo, our people, our brands, and performance, visit us at www.diageo.com. Visit Diageo's global responsible drinking resource, www.DRINKiQ.com, for information, initiatives, and ways to share best practice.

 

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