Diageo is paying up to $610 million for Aviation American Gin, co-owned by Hollywood actor Ryan Reynolds, and a clutch of other spirits brands, adding to a gin portfolio that already includes Tanqueray and Gordon's.
Diageo isn't new to acquiring brands linked to Hollywood celebrities, having in 2017 paid $1 billion to acquire the super-premium tequila brand Casamigos co-founded by "Ocean's Eleven" star George Clooney.
It also teamed up with music producer and rapper Sean "Diddy" Combs to sell Ciroc vodka in 2007.
Reynolds acquired an unspecified minority stake in Aviation Gin in 2018, since then the brand had thrived, Diageo, the world's largest spirits maker, said on Monday. It said Reynolds would retain his interest in Aviation American Gin.
The deal comes at a time when consumption of gin has been rising in the United States. According to the Distilled Spirits Council, distillers sold nearly 10 million nine-liter cases of gin in the United States in 2019, generating $918 million in revenue, a 3% rise over 2018.
Most of this growth was driven by the super-premium gin category where bottles cost $25 and upwards.
Aviation American Gin, which retails for $27 per 750 milliliters, is the second-largest super-premium gin brand in the United States, growing volumes at over 100% in 2019 and contributed 40% of super-premium gin category growth in the country, Diageo said, citing industry tracker IWSR.
Diageo is paying up to $610 million for Aviation Gin LLC and Davos Brands LLC, whose portfolio also includes Astral Tequila, Sombra Mezcal and TYKU Sake.
The 43-year old actor, star of the superhero movie Deadpool, is also creative director of the brand and more recently was applauded for his "genius" in roping in commercial actress Monica Ruiz to promote Aviation Gin, days after she appeared in a widely panned ad for exercise bike maker Peloton Interactive Inc that was seen as sexist.
The tongue-in-cheek video advertisement by Aviation garnered 5 million-plus views on its first day.
Diageo's acquisition comes just two weeks after the maker of Johnnie Walker whiskey and Smirnoff vodka said yearly profit had nearly halved as widespread closures of pubs and restaurants, cancellation of sporting events and a plunge in duty-free purchases hit global demand.
It also took a 1.3 billion pound ($1.7 billion) charge on some slow-selling brands.
($1 = 0.7636 pounds)