The tempo is only increasing in the spirits industry’s game of musical chairs. On Monday (11.12), the Sazerac Company issued a release announcing the purchase of 19 brands from Diageo’s portfolio.
The corporations stated that the new Sazerac acquisitions are Seagram’s V.O. 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 brands.
“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,” stated Jake Wenz, Sazerac’s Chief Operating Officer in a statement.
According to Diageo, Sazerac will shell out some $550 million for the acquisition. The transaction is expected to be complete by early 2019. At that point Diageo’s projects a net gain of about $438 million (after taxes and incidentals) which will be used to repurchase shares from stockholders.
“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,” said Ivan Menezes, Chief Executive of Diageo in a statement. Today’s announcement is another example of this strategy in action.”
Although Menezes said that the move was intended to allow greater focus in the premium market, Diageo will be involved with their old ranges for a while. For ten years, the company will continue to supply five of the brands to Sazerac. The remaining brands will transition in supply over a one year period beginning with the final signatures on the deal.