Diageo Hires Bankers to Sell U.S.-Focused Spirits Brands--Update
May 24 2018 - 9:23AM
Dow Jones News
By Saabira Chaudhuri
LONDON -- Diageo PLC has hired bankers to sell its Canadian
whisky brand Seagrams VO and cinnamon schnapps Goldschlager among
other spirits brands, according to people familiar with the
matter.
Diageo, the world's largest liquor maker, is also looking to
unload other middle-market brands like Myers rum, Popov vodka and
Romana sambuca, according to these people as it looks to tighten
its focus on pricier, international brands that are seeing stronger
growth.
Centerview Partners has been hired to sell the portfolio, which
could bring in proceeds of up to $1 billion.
Sky News reported on Diageo's move earlier Thursday.
The process kicked off only this week but the company is hoping
to sell the brands in a single transaction, meaning likely buyers
will include private-equity firms, according to one of the
people.
"We regularly review our portfolio to ensure we are maximizing
shareholder value," said a Diageo spokeswoman.
Shares were up 1.6% in afternoon trading in London.
Diageo -- which owns over 200 brands -- has been shuffling its
portfolio in recent years as it looks to shed low-growth assets and
increase its exposure to promising markets and categories.
In 2015 it sold Scottish hotel and golf resort Gleneagles Hotel
Ltd. Later that year it agreed to sell most of its wine portfolio
to Treasury Wine Estates Ltd. for $552 million.
Millennials, in particular, are drinking less alcohol but
spending more money per drink, according to executives, and Diageo
like other drinks companies has been trying to play to this
trend.
Last year it bought Casamigos, an upscale tequila brand
co-founded by actor George Clooney that increases its exposure to
the fast-growing tequila market. In 2015 it swapped its Bushmills
Irish whiskey brand for Don Julio, previously owned by Jose Cuervo
and last year launched a new, pricier Irish whiskey brand called
Roe & Co.
In the U.S., the company's largest and most profitable market,
Diageo has been focused on trading drinkers up to high-end variants
of brands like Tanqueray and Johnnie Walker while simultaneously
trying to buoy vodka sales, which have flagged in the face of
competition from Fifth Generation Inc.-owned Tito's Handmade
vodka.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
May 24, 2018 09:08 ET (13:08 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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