Diageo, the UK based alcoholic drinks giant, has announced the sell-off of 19 brands to the US spirits firm Sazerac for an aggregate consideration of $550 million.
The transaction includes the whiskey brands Seagram’s VO, Seagram’s 83 and Seagram’s Five Star, the rum brands Myers’s and, Parrot Bay, the sambuca brand Romana, the vodka brand Popov, the liqueur brands Yukon Jack and Goldschlager, and the cocktail brand Stirrings, alongside brands such as The Club, Scoresby, Black Haus, Peligroso, Relska, Grind, Piehole, Booth’s and John Begg.
Diageo said it had also agreed to enter into long-term supply contracts with Sazerac for five of the brands each for a period of 10 years, while supply of the remaining brands will transition to Sazerac within a one year period from completion.
Commenting on the deal, which is expected to close in early 2019, Diageo chief executive Ivan Menezes 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”.