Diageo to buy George Clooney’s Casamigos tequila
By Andy Young
Diageo has entered into a definitive agreement to acquire Casamigos, the super-premium tequila brand founded by George Clooney, Rande Gerber and Mike Meldman.
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.
Speaking about the deal, 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, added: “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.”
Casamigos Tequila Co-founder, Rande Gerber, was understandably delighted with the deal to buy the brand, which started as drink just for friends.
“We are extremely excited to team up with one of the largest, most respected spirits companies in the world,” said 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.”
Jeremy Cunnington, senior alcoholic drinks analyst, Euromonitor International, said it is a seller's market at the moment, but was still surprised by the move from Diageo.
“Key element is the continued healthy growth of tequila, especially in the US, driven by high end tequilas such as Casamigos," Cunnington said.
"The company obviously feels that the growth trajectory of the brand, especially with its added distribution heft will produce results. However, considering they already have a raft of high end tequilas, such as Don Julio, Peligrosso and De Leon it does seem rather surprising."
He added: "However, it is worth noting that this acquisition is part of a general trend of companies willing to pay very high multiples for spirits brands of perceived quality eg Pernod Ricard and Smooth Ambler and Constellation’s recent spirits acquisitions. It is very much a sellers market and a number of buyers will be burnt with their optimism for the brands’ performance not matching reality.”