Diageo to buy George Clooney’s tequila brand Casamigos for up to $1 billion

Diageo, which has arrangements with other celebrities including David Beckham and Sean Combs, said Casamigos will be neutral to earnings for the first three years and add to earnings thereafter.

As reported BBC Diageo Plc has agreed to buy high-end tequila brand Casamigos in a deal valuing it at up to $1 billion, as the world’s largest spirits maker seeks to boost its presence in a high-growth market.

Diageo said on Wednesday it would pay $700 million initially for the company, co-founded by the American actor, with potential payment of a further $300 million linked to performance over 10 years.

Casamigos, which means “house of friends,” was founded in 2013 by Clooney and his friends – nightlife entrepreneur Rande Gerber, who is married to model Cindy Crawford, and real estate developer Mike Meldman. They will continue to promote the brand.

The brand sold 120,000 9-litre cases in 2016, primarily in the United States, and is on track to reach over 170,000 by the end of the year. Diageo said expanding the brand to Europe would be a source of future growth.

Diageo’s other tequila brands include Don Julio, DeLeon and Peligroso. It distributed Jose Cuervo outside of Mexico until 2012, following its failure to strike a deal to buy it outright from the brand’s founding family.

The Casamigos deal is expected to close in second half of the year.