The world's largest producer of spirits, Diageo, announced on Monday that it was purchasing Aviation American Gin, co-owned by Hollywood star Ryan Reynolds, by acquiring Davos Brands LLC and Aviation Gin LLC for nearly $610 million.
Under the conditions of the deal, Diageo will also obtain the ownership of other brands within Davos Brands' portfolio such as Astral Tequila, TYKU Sake and Sombra Mezcal. Reynolds will retain the ownership interest of Aviation American Gin.
Diageo Not New to Acquisitions
The move comes just two weeks after the maker of Johnnie Walker whiskey and Smirnoff vodka posted a yearly profit that nearly halved as widespread closures of pubs and restaurants, cancellation of sporting events and a plunge in duty-free sales hit global demand.
The company is not new to acquiring brands owned by famous Hollywood celebrities. In 2017, it paid $1 billion in total to acquire the super-premium tequila brand, Casamigos, that was co-founded by Ocean's Eleven star George Clooney.
Consumption of Gin On the Rise In US
The deal also comes at a time when the consumption of gin has been rising in the United States. According to the Distilled Spirits Council, distillers sold nearly 10 million 9-liter cases of gin in the United States in 2019, generating $918 million in revenue, a 3 percent rise over 2018.
Aviation American Gin grew volumes at over 100 percent in 2019, adding the highest number of cases and contributing 40 percent of super-premium gin segment growth in the United States, Diageo said in a statement. Aviation American will join Diageo's wide-ranging portfolio of gins, that include Tanqueray and Gordon's. Shares of Diageo were up 0.7 percent at 2620.5 pence in afternoon trading.
(With inputs from agencies)