Diageo pays up to $1bn for George Clooney tequila brand

Sale of Casamigos underscores revival of tequila and mescal

George Clooney founded Casamigos with friends  Rande Gerber and  Mike Meldman as a side project. Photograph:  AFP

George Clooney founded Casamigos with friends Rande Gerber and Mike Meldman as a side project. Photograph: AFP

 

An upmarket tequila brand launched four years ago by Hollywood actor George Clooney and two of his friends has been valued at up to $1 billion in an agreed offer from Diageo, the UK-based drinks group that owns Guinness.

Casamigos, which the actor founded with Cindy Crawford’s husband Rande Gerber and flamboyant real estate developer Mike Meldman as a side project, instantly enjoyed the backing of America’s rich and famous, helping propel the brand to sales of 120,000 cases in 2016, mainly in the US.

The deal underscores the revival of tequila and mescal as trendy spirits, which is seeing companies in the sector command lofty prices. Earlier this month, France’s Pernod Ricard agreed to take a majority stake in Del Maguey Single Village Mezcal.

Diageo will pay $700 million (€627m) for Casamigos, which loosely translates as “house of friends” and is largely controlled by its three founders, when the deal closes. An additional $300 million (€269m) is payable depending on the performance of Casamigos over 10 years.

Tequila has until recently represented a gap in the drinks cabinet of Diageo, which sells nine labels of American and Scotch whisky but just two brands of the Mexican spirit. Casamigos will sit alongside the company’s Don Julio tequila brand, which has registered double-digit growth in the year to June 2016.

Diageo plans to keep Mr Clooney and his partners on board, and hopes to use its international reach to speed up Casamigos’ growth.

Sales of super-premium tequila brands grew nearly 600 per cent in the US between 2003 and 2015, according to the Distilled Spirits Council of the United States, far outpacing other spirits.

Mexico’s top tequilas have led the growth, with volumes of ultra-premium tequila rising 35 per cent in 2016 compared with 2015 to make up a third of tequila’s $7 billion global sales, according to the IWSR, the London-based authority on the drinks trade.

– The Financial Times Limited 2017