GLOBAL: Diageo acquires DeLeón Tequila with Sean 'Diddy' Combs

By | 8 January 2014

Diageos Larry Schwartz & Sean Diddy Combs seal the deal on DeLeon Tequila

Diageo's Larry Schwartz & Sean 'Diddy' Combs seal the deal on DeLeon Tequila

Diageo has upped its interest in the Tequila category through the acquisition of the DeLeón brand as part of a joint-venture agreement with rap artist and producer Sean 'Diddy' Combs.

In an announcement today (8 January), the drinks group said it has agreed a 50/50 global partnership with the 'Wine & Spirits' unit of Combs' business empire for the high-end brand. The deal, whose financial terms were not disclosed, builds on a tie-up between the company and musician on Cîroc vodka in 2007

DeLeón is a 100% blue weber agave Tequila, which has a "loyal following in Hollywood and the US music industry", according to Diageo.  

News of the deal first broke earlier this week, but reports did not mention Diageo's involvement.

The brand, currently distributed in 18 US states and Washington DC, has five variants with suggested retail prices ranging from US$120 to around $1,000.

DeLeon's current volumes are "less than 10,000 cases a year", a Diageo spokesperson told just-drinks. 

Larry Schwartz, Diageo's North America president said the acquisition is the "latest step towards returning to a leading position in Tequila in North America". The company relinquished its global distribution rights to Jose Cuervo last year as talks with its owners collapsed as Diageo sought to acquire the brand. Diageo's only other Tequila brand is Don Julio.

Schwartz added: “Expanding our relationship with Sean Combs into Tequila was a natural choice, given Sean’s ability to galvanise support for luxury brands, as we’ve seen with our work together on Cîroc.  

"Ultra-premium and above Tequila is a very exciting segment - we already have a strong brand there with Don Julio and are pleased to complement that offering with DeLeón.”

Brent Hocking, who established the DeLeón Tequila brand in 2008, said: "I am entrusting DeLeón Tequila to the capable hands of Diageo and Sean Combs as both have demonstrated a commitment to luxury and quality which reflects my own commitment to the DeLeón brand.”

Diageo said the JV will benefit the brand through its "strong distribution network, supply chain, and marketing capability".

Expert analysis

Tequila & Mezcal in G20 to 2015: Market Guide

This report is the result of extensive market research covering the Tequila & Mezcal market in G20. The report provides a top-level overview and detailed insight into the operating environment for the Tequila & Mezcal market in G20. It is an essential tool for companies active across the Alcoholic Drinks value chain and for new players that are considering entering the market. Scope • Overview of the Tequila & Mezcal market in G20. • Analysis of the Tequila & Mezcal market and its categories (where applicable), including full year 2010 consumption value and forecasts until 2015 • Historic and forecast consumption values for Tequila & Mezcal for the period 2005 through to 2015 Reasons To Buy • The report provides you with important figures for the Tequila & Mezcal market in G20 with individual country analysis. • The report will help you to identify trends by analyzing historical industry data. • The report will help you analyze the market with detailed historic and forecast market values, segmented at category level (where applicable). • The report will help you to enhance your knowledge of the market with key figures on consumption value and segmentation by category for the historic period. • The report will help you to plan future business decisions using forecast figures for the market. Key Highlights NA

Sectors: Mergers & acquisitions, Spirits

Companies: Diageo

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