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Diageo Said To Be Close To A Cuervo Deal

May 4, 2012

Fresh rumors are circulating that Diageo is close to acquiring a majority stake in Jose Cuervo Tequila, valued as high as $3.15 billion, from Mexico’s Beckmann family in return for Diageo stock. London’s The Times newspaper said such a deal was “understood to be weeks away,” without naming a source.

Diageo CEO Paul Walsh has said repeatedly that the current global distribution contract between the two parties, which runs through June next year, won’t be renewed as is, insisting that Diageo must secure at least a route to control of the brand. Neither company has divulged specifics about the status of negotiations, but in late March Diageo was said to have hired Goldman Sachs to bring the talks to a fruitful close, eyeing a deal by this summer. Cuervo’s global volume was down 7% (10% in North America) in the six months through last December.

 

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