Diageo PLC (DEO) -- maker of drinks Guinness and Captain Morgan -- is selling off 19 brands to family owned alcoholic beverage maker Sazerac for up to $550 million.
Among the brands Diageo is selling are big name beverages Seagram's VO, Seagram's 83, Seagram's Five Star, Myers's, Parrot Bay, Romana Sambuca, Popov, Yukon Jack, Goldschlager, Stirrings, The Club, Scoresby, Black Haus, Peligroso, Relska, Grind, Piehole, Booth's and John Begg.
American depositary receipts of Diageo were down 0.7% on the news to just under $141.37 on Monday.
The London-based company said the net proceeds of the sale -- about $437 million, after taxes and other costs -- would be returned to shareholders through a share repurchase. The sale is expected to be completed early next year.
Diageo announced a share buyback program of about $2.5 billion in August that's expected to wrap up by the end of January 2019.
"The disposal of these brands enables us to have even greater focus on the faster growing premium and above brands in the U.S. spirits portfolio," said Ivan Menezes, chief executive of Diageo, in a press statement, adding that the sale is part is part of Diageo's growth strategy.
The sale will add to the line-up of privately held Sazerac, one of America's oldest distillers that's based in Kentucky and Louisiana. Sazerac is known for drinks such as Fireball and Southern Comfort.