Diageo has agreed to sell 19 of its brands to Sazerac for a cool sum of $550m.
The transaction will see the Kentucky-based Sazerac Company take ownership of Seagram’s VO, Seagram’s 83, Seagram’s Five Star, Myers’s, Romana Sambuca, Yukon Jack, Booth’s, Goldschlager, Popov, Relska, The Club, Black Haus, Peligroso, Grind, Piehole, Parrot Bay, Stirrings, Scoresby and John Begg.
After tax and transaction fees, Diageo’s shareholders are expected to receive £340m from the sale.
‘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,’ commented Ivan Menezes, Diageo’s chief executive.
To ease the transition, Diageo has signed long-term, 10-year supply contracts with Sazerac for five of the brands. Sazerac will take hold of the supply of the remaining brands within a year of the deal’s completion.
The sale is set to finalise in early 2019, pending regulatory approval.