Diageo Sells 19 Brands for Sazerac for $550 Million

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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Diageo - Chief Executive Officer Ivan Menezes
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Diageo Chief Executive Officer Ivan Menezes.

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.

Sazerac Company - Chief Operating Officer Jake Wenz
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Sazerac Chief Operating Officer Jake Wenz.

“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.

  1. Seagram’s V.O. – Canadian whiskey blend
  2. Seagram’s 83 – Canadian whiskey
  3. Seagram’s Five Star – Canadian rye whiskey
  4. Myers’s – Rum
  5. Romana Sambuca – Sambuca
  6. Yukon Jack – Canadian Liqueur
  7. Booth’s – Gin
  8. Goldschlager – Schnapps liqueur
  9. Popov – Vodka
  10. Relska – Vodka
  11. The Club – Pre-made Cocktails
  12. Black Haus – Blackberry Schnapps
  13. Peligroso – Tequila
  14. Grind – Rum Liqueur
  15. Piehole – Canadian whiskey
  16. Parrot Bay – Rum
  17. Stirrings – Liqueurs
  18. Scoresby – Scotch whiskey
  19. 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 DistilleryBarton 1792 DistilleryA. Smith Bowman Distillery and Glenmore Distillery

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