Diageo sells off Bushmills to drinks giant Jose Cuervo
Diageo's sale of Bushmills was not a reflection of the latter's performance, the company insisted yesterday.
The deal is about "realising an opportunity to expand our global position in tequila and our presence in a critical emerging market", rather than dissatisfaction with Irish distillers' performance, a Diageo spokeswoman told the Irish Independent.
"The growth potential through this transaction poses greater long term benefit to Diageo," she said.
Yesterday the drinks company announced the sale of Bushmills to Mexican tequila and spirits maker Jose Cuervo for $408m (€327m) and full control of the Don Julio tequila brand.
Diageo already owned 50pc of Don Julio.
Diageo chief executive Ivan Menezes said the deal would expand the group's "leading position in Mexico where the growth of spirits has great potential".
In July, Mr Menezes said during a conference call that Bushmills has underperformed in the US. "We have tried hard over the years to get this brand into growth, and we've struggled," he said.
But yesterday the Diageo spokeswoman focused on the positive aspects of Bushmills performance.
"Bushmills grew 7pc in [net sales] the last fiscal [year]," she said. Jose Cuervo said no jobs would be lost at Bushmills as a result of the acquisition, and that the Old Bushmills Distillery in Co Antrim will continue to operate as normal.
"We see this acquisition as a fantastic opportunity to continue to nurture and grow the Bushmills Irish Whiskey brand globally, underpinned by the strong expertise and focus of Jose Cuervo as one of the world's leading drinks corporations," Jose Cuervo chief executive Juan Domingo Beckmann said.
The purchase is the most important in Jose Cuervo's history, Mr Beckmann added.
Diageo first acquired Bushmills in June 2005 for about $365m (€292m).
It saw the whiskey's key markets as the US, Russia, Ireland, France and the UK.
"Today's deal tidies up the whole arrangement with Cuervo," said Ian Shackleton, an analyst at Nomura International.
"Don Julio and Bushmills are both good brands. There's no doubt that today Don Julio has much more a premium, even ultrapremium aspect," he said.
A bottle of Don Julio can cost about three times as much as a bottle of Bushmills. (Additional reporting by Bloomberg)