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

LONDON: Diageo Plc agreed to acquire fast-growing US tequila brand Casamigos, paying as much as $1 billion for a business co-founded four years ago by the actor George Clooney.

The deal expands the Londonbased distiller’s lineup in a fast-growing category, where it already owns the Don Julio, DeLeon and Peligroso brands.

An initial consideration of $700 million will be fol lowed by a further potential $300 million based on a performance-linked earn-out over 10 years, Diageo said in a statement on Wednesday.

The deal will be Diageo’s biggest since its $3.2-billion acquisition of United Spirits in 2014.

It will be funded through a combination of cash and debt, and Diageo expects the deal to have limited impact on earnings per share for the first three years and to be accretive thereafter. Diageo said the purchase should close in the second half. “The price looks high,” Trevor Stirling, an analyst at Sanford Bernstein said.

“So much of this depends on their belief in the growth rate of this brand.