Diageo (DEO) - Get Diageo plc Sponsored ADR Report the world’s biggest liquor merchant, said on Monday that it’s buying Aviation American Gin, co-owned by the movie actor Ryan Reynolds, through its purchase of Aviation Gin LLC and Davos Brands LLC.
The deal price is as much as $610 million. The price “includes an initial payment of $335 million and a further potential consideration of up to $275 million based on the performance of Aviation American Gin over a 10-year period,” the U.K. company said in a news release.
“This reflects the brand’s current growth trajectory and expected upside potential.”
It didn’t hold back the hype about Reynolds’ brand. “Aviation American Gin is an American-style gin crafted with a blend of botanicals, with subtle juniper notes, delivering a smooth balanced flavor profile,” the company said.
“The brand has thrived under the leadership of its majority owner, Davos Brands, and the creative direction of co-owner Ryan Reynolds, who will retain an ongoing ownership interest in Aviation American Gin.”
The deal will bring the other brands from Davos Brands’ portfolio, too: Astral Tequila, Sombra Mezcal and TYKU Sake.
Earlier this month, Diageo reported declines in sales and earnings for fiscal 2020 ended June 30, as demand from bars dropped thanks to coronavirus-related lockdowns.
Diageo's fiscal 2020 operating profit of 2.1 billion pounds ($2.73 billion) was 47% below the year-earlier level as sales fell 8.7% to 11.8 billion pounds ($15.33 billion).
Diageo American depositary receipts recently traded at $138.59, up 1.7%. The stock has dropped 18% year to date, as the coronavirus pandemic has raged.