Diageo and Sazerac have announced the sale of nineteen brands moving from Diageo to Sazerac for $550 million. Diageo says the ‘disposal’ of these brands will allow them to focus more on the premium end of the market. The brands include a variety of whiskey, rum, vodka, tequila and liqueurs.
In a statement, Diageo said the net proceeds of approximately £340 million, after tax and transaction costs, will be returned to shareholders through a share repurchase following completion, which will be incremental to the previously announced programme of up to £2bn. The transaction, which is subject to regulatory approval, is expected to complete early in 2019. The transaction is approximately 1.9 pence per share dilutive to pre-exceptional eps in the first full financial year and is expected to generate an exceptional gain on disposal of approximately £90m.
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Ivan Menezes, Chief Executive of Diageo, 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.”
Sazerac says they plan to continue to produce all 19 brands. Diageo has also agreed to enter into long-term supply contracts with Sazerac on completion for five of the brands each for a period of ten years. Supply of all other brands will transition to Sazerac within a one year period from completion.
“We are delighted to acquire these iconic brands from Diageo and are looking forward to working closely with our wholesalers and customers to provide the focus to maximize the full global potential of the brands,” said Jake Wenz, Sazerac’s Chief Operating Officer.
19 Brands Sold by Diageo to Sazerac
Here’s the full list of liquor brands moving from Diageo to Sazerac.
- Seagram’s V.O. – Canadian whiskey blend
- Seagram’s 83 – Canadian whiskey
- Seagram’s Five Star – Canadian rye whiskey
- Myers’s – Rum
- Romana Sambuca – Sambuca
- Yukon Jack – Canadian Liqueur
- Booth’s – Gin
- Goldschlager – Schnapps liqueur
- Popov – Vodka
- Relska – Vodka
- The Club – Pre-made Cocktails
- Black Haus – Blackberry Schnapps
- Peligroso – Tequila
- Grind – Rum Liqueur
- Piehole – Canadian whiskey
- Parrot Bay – Rum
- Stirrings – Liqueurs
- Scoresby – Scotch whiskey
- John Begg – Scotch whiskey
Diageo said further details with respect to the execution of the additional share repurchase will be made available following completion of the transaction and aligned with the execution of the remaining tranches of the previously announced program of up to £2bn.
Diageo’s other brands include Johnnie Walker, Crown Royal, JεB, Buchanan’s and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.
The Sazerac Company of brands include products from Buffalo Trace Distillery, Barton 1792 Distillery, A. Smith Bowman Distillery and Glenmore Distillery
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