Spirits maker Diageo plc (DEO) - Get Report announced Wednesday, June 21, that it will acquire Casamigos Spirits Co., a tequila company co-founded by George Clooney, for up to $1 billion.

Diageo will pay an initial consideration of $700 million and up to $300 million in unspecified performance-linked earnouts over the next 10 years.

Diageo American Depositary Receipts on Wednesday closed down 0.4% at $121.75.

Casamigos was founded in 2013 by actor Clooney, nightlife entrepreneur Rande Gerber (the husband of model Cindy Crawford) and developer Mike Meldman. The trio "will continue to promote the brand and provide their leadership and vision ... [with] continued involvement and active participation in the future success of Casamigos," Diageo said in a statement.

Clooney told Business Insider the business started "by accident" after drinking a variety of tequilas in Mexico.

"If you asked us four years ago if we had a billion-dollar company, I don't think we would have said yes," Clooney told CNBC in an email. "This reflects Diageo's belief in our company and our belief in Diageo. But we're not going anywhere. We'll still be very much a part of Casamigos. Starting with a shot tonight. Maybe two."

Diageo said the brand sold 120,000 cases in 2016 and is on track to reach more than 170,000 cases in 2017, growing at a compound annual growth rate of 54% over the past two years.

Roland Phillips and James Tookman of Centerview Partners LLC provided financial advice to Diageo, which retained a Sullivan & Cromwell LLP team led by Melissa Sawyer as its outside counsel.

Clooney, Gerber and Meldman tapped Larry Waks of Wilson Elser Moskowitz Edelman & Dicker LLP as their outside counsel for the deal.

Diageo is no stranger to celebrity tequila acquisitions. Since 2014 the London-based drinks company has owned a 50% stake in a joint venture with Combs Wine & Spirits, founded by rapper Sean "Diddy" Combs, which owns the other half. The JV acquired ultrapremium tequila brand DeLeon for undisclosed terms.

Combs also has served as brand ambassador for Diageo vodka brand Ciroc since 2007, a deal worth a reported $100 million. Three weeks after the DeLeon deal, Diageo acquired another producer of superpremium tequila, Peligroso Spirits Co. LLC, for undisclosed terms.

Also in 2014, Diageo agreed to an asset swap with Jose Cuervo owner Tequila Cuervo la Rojena SA de CV, in which Diageo bought the outstanding 50% of Cuervo's Tequila Don Julio brand, while Cuervo ceded the right to produce and distribute Diageo's Smirnoff vodka. Diageo also sold Bushmills whiskey to Jose Cuervo Overseas and received a net payment of $408 million.

The Casamigos purchase is Diageo's largest since its 2014 bid for majority control of India's United Spirits Ltd., worth over $3 billion.

As of Diageo's 2016 annual report, tequila accounted for just 1% of Diageo's net sales, dwarfed by scotch at 24%, beer at 18% and vodka at 13%, among others. Tequila volume grew 15% in fiscal 2016, with organic net sales up 8%, driven by Don Julio growth in the U.S.

Diageo's other brands include Johnnie Walker, Crown Royal, Captain Morgan, Baileys, Tanqueray, Ketel One and Guinness.

Tequila sales as a whole are growing at an average rate of 5.8% per year, according to the Distilled Spirits Council, with superpremium and high-end tequilas up 292% since 2002.

Diageo anticipated the deal would close by the end of the year and said it would fund the transaction with existing cash and debt. Diageo said in its statement that the acquisition will be neutral to earnings per share during the first three years after the close, accretive thereafter and economic profit positive in the fourth full fiscal year after the close.

The Casamigos sale follows the long-awaited February initial public offering in Mexico of the Jose Cuervo parent, which raised about 18.64 billion pesos ($1.03 billion). Singaporean sovereign wealth fund Temasek Holdings Pte. Ltd. took a 20% stake in the offering, and Mexico's Beckmann family still controls the company.

A Diageo spokeswoman said the Casamigos deal did not follow an auction process but would not comment further. Casamigos did not respond to requests for comment. —David Marcus contributed to this report

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