Diageo has agreed to acquire Aviation Gin and its owner Davos Brands for a total consideration of up to $610m (£463m).
The deal will see Diageo take ownership of Aviation American Gin which is claimed to be the second-largest and one of the fastest-growing brands within the super-premium gin segment in the US. In 2019, it grew volumes at over 100%, adding the highest number of cases and contributing 40% of the segment’s growth.
The agreement includes an initial payment of $335m and a further potential consideration of up to $275m based on the performance of Aviation American Gin over a ten-year period.
Aviation American Gin is majority-owned by Davos Brands, with Hollywood actor Ryan Reynolds holding a stake he acquired in 2018. Under the terms of the transaction, Reynolds will remain the public face of the gin brand for the next 10 years and retain an ownership interest.
The acquisition will see Diageo also acquiring other brands in the Davos portfolio such as Astral Tequila, Sombra Mezcal and TYKU Sake. The British spirits giant stated that it plans to use its expertise to further develop these brands and grow Aviation Gin internationally.
“The acquisition of Aviation American Gin and the Davos Brands portfolio is in line with our strategy to acquire high growth brands with attractive margins that support premiumisation,” said Ivan Menezes, CEO of Diageo.
“We are confident that Aviation American Gin will continue to shape and drive the growth of super premium gin in North America and we are looking forward to working with Ryan Reynolds and the Davos Brands team to accelerate future growth.”
Andrew T. Chrisomalis, Co-Founder and CEO of Davos Brands, added: “Extraordinary partnership and teamwork brought us here, and with the continued creative genius of Ryan Reynolds, and this new, best in class global partnership with Diageo, the sky is truly the limit for Aviation American Gin and Davos Brands.”
The acquisition is expected to close before the end of 2020, subject to regulatory clearances.
Diageo has snapped up several celebrity-fronted alcohol businesses in recent years. In 2017, it bought George Clooney’s Casamigos tequila brand for $700m and in 2014 it teamed up with P Diddy to buy DeLeón tequila. It also has a marketing partnership with David Beckham for its Haig Club whisky.
