Reuters Insider - Diageo to sell 19 brands to Sazerac for $550 mln

Brompton Lifeco Split

13/11/2018 24:32

Click the following link to watch video: https://share.insider.thomsonreuters.com/link?entryId=0_c0cadsh2&referenceId=tag:reuters.com,2018:newsml_OV967B43V_930&pageId=ReutersNews
Source: Reuters Insider

Description: The world's largest spirits company, Diageo, is selling 19
lower-end spirits brands to Sazerac for $550 million, to focus on its premium
labels, including Johnnie Walker. Fred Katayama reports.
Short Link: https://reut.rs/2Di5lOn

Video Transcript:

The world's largest spirits company Diageo is selling 19 lower-end spirits
brands to Sazerac of the US for USD550 million. Those brands include Seagram's
VO Canadian whiskey and Goldschlager cinnamon schnapps. UK-based Diageo says
the sale will help it shift away from the low end of the market in North
America, where sales are falling, and move into the more popular premium
labels. Reuters Correspondent Harry Brumpton.

High margin, high performing and then not scaling large – so they're keen
to get out of them. For Sazerac, it's a chance to pick up a new bunch of
brands and expand their own portfolio at what's pretty good value actually. So
this deal is just over half-a-billion Dollars, but when you factor in some
long term supply agreements, it's really just a few hundred million Dollars,
so they're getting them on the cheap.

The North American region is the biggest market for premium drinks in the
world. It accounts for a third of Diageo's sales in nearly half of its
operating profit. The company's shares fell on the news in London