Diageo buys Clooney’s tequila
• George Clooney set to earn big on Casamigos
George Clooney may be the face of fancy coffee, but it is in premium tequila that he just hit the jackpot. Diageo agreed to acquire fast-growing tequila brand Casamigos, co-founded by Clooney, for as much as $1bn.
George Clooney may be the face of fancy coffee, but it is in premium tequila that he has just hit the real jackpot.
Diageo agreed to acquire fast-growing tequila brand Casamigos, co-founded four years ago by Clooney, for as much as $1bn.
The deal expands the London-based distiller’s line-up in a fast-growing category, where it owns the Don Julio, DeLeon and Peligroso brands.
The purchase will be Diageo’s biggest since its $3.2bn acquisition of United Spirits 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.
US tequila volume more than doubled in 2002-15, according to the Distilled Spirits Council.
Clooney, better known for his role in movies and as a pitchman for Nespresso coffee, created Casamigos in 2013 with developer Mike Meldman and entertainment entrepreneur Rande Gerber, who is married to model Cindy Crawford.
They got in on the tequila boom after a tasting in Cabo San Lucas, Mexico, where Clooney and Gerber had built holiday homes. Now they are cashing out with an initial consideration of $700m, which could be followed by a potential $300m based on a performance-linked earn-out over 10 years, according to a Diageo statement.
Its shares fell as much as 1% early in London on Thursday.
“The price looks high,” Trevor Stirling, an analyst at Sanford C Bernstein, said. “So much of this depends on their belief in the growth rate of this brand.”
Casamigos was growing at 40% to 50% and was on track to sell 170,000 12-bottle cases in 2017, Diageo North America president Deirdre Mahlan said. That compares with about 26million cases of Smirnoff vodka Diageo sells annually.
Brands growing at such a pace are “notoriously challenging to value under traditional methods”, Mahlan said.
Casamigos, packaged in clear bottles with Clooney’s signature adorning the label, is distilled by an undisclosed partner in Mexico.
Casamigos is sold in three expressions, priced between $45 and $55: Blanco, which is clear; Reposado, which is golden-coloured; and Anejo, a dark amber variant and the brand’s oldest.