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Diageo buys George Clooney's tequila company

The spirits company dives further into the North American market with a deal that could be worth up to $1bn over the next 10 years
June 22, 2017

Diageo (DGE) appears to be moving past previous concerns about lacklustre trading in North America. Yesterday the spirits company announced that it will acquire Casamigos, the 'house of friends' tequila brand set up by George Clooney, Rande Gerber, and Mike Meldman, at up to $1bn (£789m), split between a $700m initial consideration and a further potential $300m based on performance linked earn-out over 10 years. The trio will stick with the company after the deal goes through, expected sometime in the second half of 2017, and will continue to promote the brand.

IC TIP: Buy at 2331p

Casamigos sold 120,000 cases in 2016, primarily in the US, delivering a compound annualised growth rate of 54 per cent over the past two years. It is on track to reach 170,000 cases sold by the end of 2017. Diageo's North America president Deirdre Mahlan called the tequila sector an "exciting and high-growth" category, and added that Casamigos will play a complementary role alongside its existing brand Tequila Don Julio.