LONDON (dpa-AFX) - Diageo (DGE.L, DEO), on Tuesday, announced an agreement to acquire Don Papa Rum, a super-premium, dark rum from the Philippines. The upfront consideration is €260 million with a further potential consideration of up to €177.5 million through to 2028 subject to performance, reflecting the brand's current growth potential.
The super-premium plus segment of the rum category is in the early stages of premiumisation, with a compound annual growth rate or CAGR of 18% in Europe and 27% in the US between 2016-2021. Through the same period, Don Papa Rum consistently outperformed the market in Europe, delivering a 29% CAGR.
John Kennedy, President, Diageo Europe and India, commented: 'We are excited by the opportunity to bring Don Papa into the Diageo portfolio to complement our existing rums. This acquisition is in line with our strategy to acquire high growth brands with attractive margins that support premiumisation, and enables us to participate in the fast growing super-premium plus segment.'
The company further noted that the acquisition will be funded through existing cash reserves and is expected to close in the first half of 2023. The company will be available to discuss the transaction in more detail after the release of Diageo's fiscal 23 interim results on 26 January 2023.
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