Diageo agrees sale of 19 brands in $550m US deal

Drinks firm Diageo has sold a number of brands in the US, including Parrot Bay

Joanna Hodgson12 November 2018

Drinks giant Diageo on Monday agreed a $550 million (£430 million) sale of 19 spirits brands in the US, allowing the Guinness and Cîroc vodka maker to concentrate on more upmarket products.

The FTSE 100 firm said private US-based firm Sazerac is snapping up the portfolio, which includes Parrot Bay ‘Freeze and Squeeze’ cocktail pouches and Seagram's whisky.

Finance chief Kathy Mikells said Diageo has had the brands for a long time and they make most of their revenues in America.

Chief executive Ivan Menezes said: “The disposal enables us to have even greater focus on the faster growing premium and above brands in the US spirits portfolio.”

His firm has also agreed to enter into long-term supply contracts with Sazerac for five of the brands each for a period of 10 years.

Diageo will net £340 million from the sale after tax and costs, which will be added to its existing £2 billion share buyback.

Shares fell 17p to 2729p today.