Deal of Swapping Brands Close to Completion between Diageo and Jose Cuervo
Reportedly, Diageo is about to close a deal with Jose Cuervo which will give the British drinks maker absolute ownership of Don Julio tequila. In exchange it will give its whiskey label Bushmills to Cuervo.
Both sides are in advanced level of discussions related to the deal where Cuervo will give Diageo the fifty percent of Don Julio which it already does not own, along with some cash payment. In return Diageo will hand over the label Bushmills to Cuervo.
The Beckmann family of Mexico owns Jose Cuervo. Diageo and the Beckmann family for a long time had a distribution contract which was terminated last year.
Don Julio enjoys an upmarket portfolio in tequilas and currently enjoys a boost in its sales of about 25% per year. This surely outpaces the growth of the world's biggest brand of tequila, Jose Cuervo.
This deal will be great for Diageo as it will enable the largest maker of spirits in the world to enhance its presence felt in the high-end tequila market. The company's efforts to buy the entire Jose Cuervo did not shape up when it tried to make a deal two years back.
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