Diageo selling Seagram’s VO, 18 more for $550M
Diageo is selling its Seagram’s VO whiskey label and 18 others to Sazerac for $550 million, with plans to plow the proceeds into repurchasing shares.
Diageo, among the largest alcohol companies in the world, is based in London with its North American headquarters in Norwalk. Sazerac is a family-owned company based in Metairie, La., that has operations coast to coast, with its brands including A. Smith Bowman, Buffalo Trace Distillery, Mr. Boston and Southern Comfort.
Other brands Sazerac is buying from Diageo include Seagram’s 83, Seagram’s Five Star and Yukon Jack whiskeys; John Begg and Scoresby scotch; Romana Sambuca; Myers’s and Parrot Bay rum; Popov and Relska vodkas; Peligroso tequila; Booth’s gin; Black Haus schnapps; Goldschlager and Piehole liqueurs; Grind espresso shot; and Stirrings cocktail mixers.
Only a few years ago, Diageo had sued Sazerac for trademark infringement on claims the bottling for the latter company’s Dr. McGillicuddy line of whiskey bore too close a resemblance to Diageo’s Bulleit brand. The companies settled the dispute within a matter of months.
In a written statement, Diageo CEO Ivan Menezes said the deal allows Diageo to focus on faster-growing premium brands in the U.S. market. Of brands specified in its most recent annual report, Diageo estimated the intangible value of the Seagram’s VO brand at $144 million, with Joseph Seagram first distilling the whiskey in 1913 to mark his son’s wedding. Diageo bottles Seagram’s VO near Montreal in Valleyfield, Quebec.
Diageo did not include Seagram’s 7 Crown whiskey among the brands it is transferring to Sazerac, with the whiskey ranking among the company’s top 15 most valuable brands.
Crown Royal tops that list for Diageo with a listed value of $1.4 billion, with Bulleit and Johnnie Walker among the top six whiskey or scotch brands globally as ranked last February by BevSpot. Diageo recently unveiled a lineup of eight Johnnie Walker blends under a licensing agreement with HBO and its “Game of Thrones” series.
Diageo has the top rum brand in the world as well in Captain Morgan; and the second largest tequila label in Don Julio.
Last year, Diageo spent $700 million to acquire the Casamigos brand of tequila co-owned by Hollywood star George Clooney, in a deal that could swell to $1 billion depending on how the brand performs.
Alex.Soule@scni.com; 203-842-2545; @casoulman