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Diageo and Combs Form New Joint Venture and Acquire Deleon Tequila

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Diageo and Combs Form New Joint Venture and Acquire Deleon Tequila

Diageo and Combs Form New Joint Venture and Acquire Deleon Tequila
January 09
14:29 2014

Diageo has taken a major step in reclaiming leadership of the tequila sector in North America after forming a joint venture with Combs Wine & Spirits, which has acquired prestige tequila brand DeLeon.

The joint venture, a 50/50 global partnership between Diageo and Combs Wine & Spirits, headed by Sean Combs, builds on the separate strategic alliance formed by Diageo and Combs Enterprises to develop and grow the Ciroc ultra-premium vodka brand. Since the alliance began in 2007, Cîroc has grown from just 50,000 cases a year into a nearly 2 million case brand.

The joint venture acquisition of DeLeon will allow the brand to benefit from Diageo’s strong distribution network, supply chain, and marketing capability and Combs’ access to influencers and proven track record of marketing luxury lifestyle brands.

DeLeon is a 100% blue weber agave boutique tequila brand with a loyal following in Hollywood and the US music industry. The brand has strong appeal with status-conscious consumers who choose spirit brands as part of their luxury lifestyle.

The acquisition of DeLeon will accelerate Diageo’s share of ultra-premium and above ($40+) tequila, which is the second-fastest growing segment of the tequila category in the US. DeLeon has five variants with suggested retail prices ranging from $120.00 to over $1,000.00. The brand has been distributed in 18 US states and Washington, DC.

“The joint venture with Combs Wine & Spirits and its purchase of DeLeon is Diageo’s latest step towards returning to a leading position in tequila in North America,” says Larry Schwartz, president of Diageo North America. “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 Ciroc. 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 DeLeon.”

“DeLeon is an outstanding brand that appeals to those who love exceptional tequila in a distinctive bottle. Together with Diageo, we will take DeLeon to new heights,” says Sean Combs, chairman of Combs Wine & Spirits.

CAPTION:

Larry Schwartz, president of Diageo North America, and Sean Combs, chairman of Combs Wine & Spirits.

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