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Diageo sells a portfolio of non-core brands, including Seagrams Canadian Whiskey and Schnapp Goldschlager, to US-based Sazerac, while the British beverage giant focuses more on high-end spirits.
The transaction, which should be finalized early next year, amounts to $ 550 million and will bring 340 million pounds to Diageo.
"While the transaction may be dilutive for profits. . .[it]Diageo's operations in the United States will improve, as the brands sold by Diageo saw their sales fall by 10% compared to the previous year, "says Javier Gonzalez Lastra, an analyst at Berenberg.
In recent years, Diageo has gradually divested non-core brands as it focuses on its premium offering. The sale of this brand portfolio was announced earlier in the year with a suggested price ranging from $ 500 million to $ 1 billion.
Ivan Menezes, Managing Director, said: "The divestment of these brands allows us to focus even more on the high-end, fast-growing brands in the US spirits portfolio."
The company said the proceeds would be returned to shareholders through share buybacks, in addition to the buyback program announced last August that plans to return up to £ 2 billion to shareholders by June 2019.
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