British drinks giant Diageo announced Monday the sale of Seagram's VO whisky and 18 other brands to US firm Sazerac for US$550 million, to focus on premium US labels.
The deal, worth 488 million euros, will also see Diageo offload Seagram's 83 and Seagram's Five Star, as well as Goldschlager schnapps, Myers's rum, Peligroso tequila, Popov vodka and Romana Sambuca.
Net proceeds of £340 million (US$440 million), after tax and transaction costs, will be returned to shareholders via a stock repurchase.
“Diageo has a clear strategy to deliver consistent efficient growth and value creation for our shareholders,” said chief executive Ivan Menezes in a statement.
“This includes a disciplined approach to allocating resources and capital, to ensure we maximise returns over time. The disposal of these brands enables us to have even greater focus on the faster-growing premium and above brands in the US sprits portfolio.”
The deal, subject to regulatory approval, is set to be completed early next year.
Diageo also produces Guinness stout, Smirnoff vodka, Baileys liqueur and Johnnie Walker whisky.
In 2017 the London-listed giant bought Casamigos, an upscale super premium tequila brand co-founded by Hollywood star George Clooney.