Diageo has agreed the sale of 19 brands to US firm Sazerac for $550 million as it aims to focus on growing its premium spirits portfolio.
The brands included in the transaction are: Seagram’s VO, Seagram’s 83, Seagram’s Five Star, Myers’s, Parrot Bay, Romana Sambuca, Popov, Yukon Jack, Goldschlager, Stirrings, The Club, Scoresby, Black Haus, Peligroso, Relska, Grind, Piehole, Booth’s and John Begg.
Diageo has also agreed to enter into long-term supply contracts with Sazerac on completion for five of the brands each for a period of ten years. Supply of all other brands will transition to Sazerac within a one year period from completion.
The announcement confirms reports earlier this year that Diageo was planning to offload the brands.
London-headquartered Diageo said net proceeds of approximately £340 million, after tax and transaction costs, will be returned to shareholders through a share repurchase following completion.
Ivan Menezes, Diageo CEO, said: “Diageo has a clear strategy to deliver consistent efficient growth and value creation for our shareholders. This includes a disciplined approach to allocating resources and capital to ensure we maximise returns over time. Today’s announcement is another example of this strategy in action.
“The disposal of these brands enables us to have even greater focus on the faster-growing premium and above brands in the US spirits portfolio.”
Earlier this year, Diageo acquired German vermouth manufacturer Belsazar through its start-up accelerator Distill Ventures.
And last month, the company expanded its “ultra-premium” Cîroc vodka portfolio with a limited-edition black raspberry variant.
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