Spirits giant Diageo is toasting the booming tequila market with the purchase of Casamigos, the fastest growing super-premium tequila brand in the US, for $1bn (£790m).
Casamigos, which was co-founded by actor George Clooney, Rande Gerber and Mike Meldman in 2013, had a compound annual growth rate of 54 per cent over the last two years. It's on track to reach over 170,000 cases sold by the end of 2017.
"We are delighted to announce this transaction today to extend our participation in the tequila category. It supports our strategy to focus on the high growth super-premium and above segments of the category," said Ivan Menezes, chief executive of Diageo.
"With the global strength of Diageo we expect to expand the reach of Casamigos to markets beyond the US to capitalise on the significant international potential of the brand."
The bid includes an initial consideration of $700m and a further potential $300m based on a performance over 10 years.
The deal is expected to close in the second half of the 2017 calendar year, and Diageo expects it to start making a profit in the fourth full fiscal year.
“We are extremely excited to team up with one of the largest, most respected spirits companies in the world,” said Gerber.
"Casamigos has always been brought to you by those who drink it and we look forward to continuing that, working alongside the expertise and global reach of Diageo."