Diageo To Acquire George Clooney's Tequila Company, But Won't Be Drinking To Profits Anytime Soon

Diageo plc (ADR) DEO announced Wednesday that it will acquire George Clooney’s tequila company Casamigos for up to $1 billion.

Diageo is the parent company of several major alcoholic beverages including Smirnoff, Captain Morgan and Guinness.

The company will pay $700 million, with the potential for an additional $300 million based on Casamigos’ performance over the next decade.

The deal is slated to close in the second half of 2017. Clooney and fellow Casamigos founders Mike Meldman and Rande Gerber will stay with the company.

Diageo expects the deal to be EPS neutral for the first three years after completion, and afterward become economic profit positive.

“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,” said Diageo CEO Ivan Menezes.

The deal is Diageo’s biggest since 2014 acquisition of United Spirits for $3.2 billion.

The stock traded recently around $122 per share.

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