As part of a strategy to strengthen its position in the Mexican market, and in tequila in particular, Diageo has agreed with Casa Cuervo the acquisition of full global ownership and control of Tequila Don Julio and the early termination of Casa Cuervo’s production and distribution agreement for Smirnoff in Mexico.
The transaction has been facilitated by another agreement consisting of selling the Bushmills brand to Jose Cuervo Overseas.
Ivan Menezes, Diageo Chief Executive, commented: ”This transaction delivers two key objectives for us. We have secured our position in the growing super and ultra-premium segments of the tequila category and further strengthened our global footprint by expanding our leading position in Mexico where the growth of spirits has great potential”.
The transaction, valued at $408 million, is expected to be completed in early 2015 subject to certain approvals.