Diageo, the world’s largest spirits maker, is swapping its Bushmills Irish whiskey brand for full ownership of the luxury tequila label Don Julio as the company looks to bulk up its stable of “reserve” brands and regain a leading position in the tequila category.
The UK-based company signed a deal with the Beckmann family of Mexico to purchase the 50% of Don Julio it doesn’t already own in exchange for Bushmills whiskey, Diageo said Monday.
Diageo [fortune-stock symbol=”DEO”] will get a $408 million payment and permission to distribute Don Julio and its Smirnoff brand of vodka in Mexico. That opens up the company to a growing market of middle-class drinkers given Mexico’s expanding economy.
“‘This transaction delivers two key objectives for us,” said Ivan Menezes, CEO of Diageo. “We have secured our position in the growing super and ultra-premium segments of the tequila category and further strengthened our global…
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