Drink giant Diageo is offloading a string of brands to US firm Sazerac for £428 million in order to focus on fast-growing demand for its “premium and above” range in the US.
Diageo, whose whisky portfolio includes the world’s best-selling Scotch Johnnie Walker, as well as Bell’s, J&B, Haig Club and Vat 69, said proceeds of the deal would be returned to investors through a share buyback.
The 19 brands being sold include three Canadian whiskeys – Seagram’s VO, Seagram’s 83 and Seagram’s Five Star.
Also going the way of Louisiana-based Sazerac are rum brands Myers’s and Parrot Bay, Romana Sambuca and Popov vodka.
Drink companies are targeting strong global demand for pricier, upmarket spirits.
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Diageo, which in recent years has sold interests in wine, beer and the Gleneagles hotel and golf resort, aims to complete its sale early next year.
Ivan Menezes, chief executive, Diageo, said: “The disposal of these brands enables us to have even greater focus on the faster-growing premium and above brands in the US spirits portfolio.”
The US accounts for about 45% of profits at Diageo, whose net sales of Scotch whisky in North America were up by 4% during the year to June 30.
Diageo – whose single malt whisky range includes Caol Ila, Cardhu, Dalwhinnie, Knockando, Lagavulin, Oban, Royal Lochnagar, The Singleton and Talisker – also makes Guinness stout, Smirnoff vodka, Baileys liqueur, Captain Morgan rum and Tanqueray gin.
Earlier this year the London-based firm unveiled £150m plans for the “biggest single investment” ever seen in Scotch whisky tourism.
The company aims to “transform” visitor centres at distilleries including Cardhu on Speyside and Clynelish at Brora in a major tourism drive based around its Johnnie Walker brand.
It is also creating an “immersive visitor experience” in Edinburgh wholly dedicated to Johnnie Walker.
Sazerac is one of America’s oldest family-owned distillers, with operations across the US and in the UK, Ireland, France, India, Australia and Canada.
Its businesses include Surrey-based drink distributor Hi-Spirits, which works with brands including Southern Comfort, Sloane’s Dry Gin, Antica Sambucca and Lazzeroni Amaretto.