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Diageo PLC – Diageo to acquire Aviation Gin and Davos
Brands
Dated
17 August 2020
17 August 2020
17
August 2020
Diageo to acquire Aviation Gin and Davos Brands
Today,
Diageo announces it has reached agreement to acquire Aviation
American Gin through the acquisition of Aviation Gin LLC and Davos
Brands LLC ('Davos Brands').
Aviation
American Gin is an American style gin crafted with a blend of
botanicals, with subtle juniper notes, delivering a smooth balanced
flavour profile. 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. Through this acquisition, Diageo
is also acquiring the other brands in the Davos Brands' portfolio
consisting of Astral Tequila, Sombra Mezcal and TYKU
Sake.
The
total consideration is up to $610 million, which 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 ten- year period. This reflects
the brand's current growth trajectory and expected upside
potential.
Commenting today Ivan Menezes,
Chief Executive of Diageo, said "We are delighted to announce this
transaction, which supports our participation in the super premium
gin segment in the United States. The acquisition of Aviation
American Gin and the Davos Brands portfolio is in line with our
strategy to acquire high growth brands with attractive margins that
support premiumisation. We are confident that Aviation American Gin
will continue to shape and drive the growth of super premium gin in
North America and we are looking forward to working with Ryan
Reynolds and the Davos Brands team to accelerate future
growth."
Ryan Reynolds
commented "A little over
two years ago, I became an owner of Aviation Gin because I love the
taste of Aviation more than any other spirit. What I didn't
expect was the sheer creative joy learning a new industry would
bring. Growing the brand with my company, Maximum Effort Marketing,
has been among the most fulfilling projects I've ever been involved
with. I want to thank Diageo for their incredible team and passion.
We're so excited for the next chapter of Aviation Gin, which, I
promise, will require just as little reading."
Aviation American Gin is the second largest and
one of the fastest growing brands within the super premium gin
segment in the United States, having disrupted the gin category
with its modern craft credentials[1].
In 2019, it grew volumes at over 100%, adding the highest number of
cases and contributing 40% of super premium gin segment
growth.[2]
The brand is well positioned to continue recruiting consumers into
gin with its accessible flavour profile and American
provenance.
The super-premium segment of the gin category is
gaining momentum in the United States. Having more than
doubled its share of the gin category between 2014 and 2019, it
grew at a compound annual growth rate of 18.5% - making it the
fastest growing spirits segment in the United
States[3].
A number of trends are supporting this growth, including consumer
interest in quality ingredients like botanicals, in the variety of
serves for gin and in craft spirits.
Davos
Brands, founded in 2014, specialises in identifying key trends and
early stage brands as well as creating and executing sales and
marketing strategies for high growth brands in high growth
categories. The acquisition of Davos Brands also provides the
opportunity to further develop the other brands in the portfolio by
benefiting from Diageo's expertise.
Andrew T. Chrisomalis, Co-Founder and CEO of Davos Brands,
commented "Brands are an
evolution, reflecting the vision and values of their founders,
sculptors and stewards. Extraordinary partnership and
teamwork brought us here, and with the continued creative genius of
Ryan Reynolds, and this new, best in class global partnership with
Diageo, the sky is truly the limit for Aviation American Gin and
Davos Brands."
Debra Crew, President Diageo
North America, commented "I am excited by the opportunity to bring
these brands into Diageo. We believe Aviation American Gin will
play an important role in building on the long term premiumisation
trends in the United States. The entrepreneurialism of the Davos
team and Ryan Reynolds combined with Diageo's strengths will help
drive the continued momentum of the brand in North America and we
feel confident that with Ryan's global reach that Aviation Gin can
expand internationally."
The
acquisition will be funded through existing cash and is expected to
close before the end of 2020, subject to regulatory
clearances.
Diageo
is a global leader in beverage alcohol with an outstanding
collection of brands including Johnnie Walker, Crown Royal, JeB,
Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel One
vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and
Guinness.
Diageo is a global company whose products are sold
in more than 180 countries around the world. The company is listed
on both the London Stock Exchange (DGE) and the New York Stock
Exchange (DEO). For more information about Diageo, our people, our
brands, and performance, visit us at www.diageo.com.
Visit Diageo's global responsible drinking
resource, www.DRINKiQ.com, for
information, initiatives and ways to share best
practice.
Celebrating life, every day, everywhere.
About Davos Brands
Our
mission is to build and develop the highest quality, best in class
spirits brands that create a meaningful and valuable connection
with consumers. We do this through teamwork, passion,
innovation, entrepreneurial spirit, and relentless perseverance.
The Davos Brands team operates in a collegiate, open-structure, and
dynamic mode. Based in New York, the Davos Brands luxury
portfolio includes owned brands Aviation Gin, TYKU Sake, Sombra
Mezcal, & Astral Tequila.
Diageo plc LEI: 213800ZVIELEA55JMJ32
[1] IWSR,
2019.
[2] IWSR,
2019.
[3] IWSR,
2019.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
