Diageo Plc. (DGE.L,DEO) agreed to acquire Casamigos, the super-premium tequila brand in the US. 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, reflecting the brand's exceptional growth trajectory and upside potential.
Casamigos was created in 2013 by founders Rande Gerber, George Clooney and Mike Meldman.
Diageo expects to close the deal in the second half of calendar 2017, subject to regulatory clearances. It expects the transaction will be EPS neutral for the first three years and accretive thereafter. It expects the acquisition will be economic profit positive in the fourth full fiscal year post-completion.
The acquisition will be funded through existing cash resources and debt, the company said.
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