Beer and spirits group Diageo (DGE) has agreed the sale of a portfolio of brands to US distiller Sazerac for $550m.
Diageo will net £340m from the sale after tax and costs which will be added to its existing £2bn share buyback.
Included in the sale are several Seagram’s whiskies, Booth’s gin, Peligroso tequila and various liqueurs, schnapps and mixers.
Supply of most of the brands will pass to Sazerac within a year of the deal completing while Diageo will maintain supply of five of the brands for a period of 10 years.
SENSIBLE STREAMLINING
This looks like a sensible move to streamline its spirits offering and allow marketing and distribution to be focused on key brands like Guinness, J&B, Johnnie Walker, Smirnoff and Tanqueray.
Sazerac is one of America’s oldest family-owned distillers with a broad portfolio of bourbons, rye whiskies, gin and tequila so the deal looks like a case of motivated seller meets willing buyer.
Diageo shares are trading sideways on the news at £27.50 after having a decent run in the last few days.
