Diageo to Buy Aviation Gin, Backed by Actor Ryan Reynolds
(Bloomberg) -- Diageo Plc agreed to acquire Aviation American Gin and other liquors sold by Davos Brands LLC, which is co-owned by “Deadpool” actor Ryan Reynolds.
The deal, for a total consideration of $610 million, is Diageo’s second acquisition in recent years of a Hollywood-backed spirit. In 2017, the maker of Smirnoff vodka and Johnnie Walker Scotch whisky acquired the fast-growing tequila brand Casamigos, which had been co-founded four years earlier by George Clooney, for as much as $1 billion.
Diageo agreed to an initial payment of $335 million and a further potential consideration of as much as $275 million based on the performance of Aviation American Gin over a 10-year period. Davos Brands, in which Reynolds will retain a stake, also owns Astral Tequila, Sombra Mezcal and TYKU Sake.
The deal will expand Diageo’s presence in super-premium gin, which has surged in popularity over the past decade as small-batch variants of the spirit have been marketed in conjunction with upscale tonics such as Fever-Tree or mixed into popular cocktails such as the Negroni.
The news comes as the world’s largest distiller wrestles with the impact of the pandemic, with bar and restaurant closures denting demand for its spirits. Earlier this month, the distiller said it had recorded a 1.3 billion-pound ($1.7 billion) impairment due to Covid-19 effects.
Diageo shares rose 0.8% in London.
The earlier deal for Casamigos expanded the London-based company’s lineup in a category where it already owned the Don Julio, DeLeon and Peligroso brands.
The latest transaction will be funded through existing cash and is expected to close before the end of 2020, subject to regulatory clearances, Diageo said.
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