Nov. 12 (UPI) -- Diageo, the world's largest liquor maker, announced the sale of 19 of its brands to competitor Sazerac Co. on Monday for $550 million.
About $441 million of that price will be returned to shareholders through stock buybacks. Diageo will also supply Sazerac with products, in some cases for up to 10 years, as the transition is completed.
The sale will allow the London-headquartered Diageo to focus on its premium brands, including Johnny Walker whiskey, Ciroc vodka and Tanqueray gin, which it regards as high-growth products. The products sold on Monday include liquor at the lower end of the market, which has seen a global decline.
Brands included in the sale are Seagram's VO, Seagram's 83, Seagram's Five Star Myers's, Parrot Bay, Romana Sambuca, Popov, Yukon Jack, Goldschlager, Stirrings, The Club, Scoresby, Black Haus, Peligroso, Relska, Grind, Piehole, Booth's and John Begg.
"Diageo has a clear strategy to deliver consistent efficient growth and value creation for our shareholders. This includes a disciplined approach to allocating resources and capital to ensure we maximize returns over time," Diageo CEO Ivan Menezes said in a statement on Monday. "Today's announcement is another example of this strategy in action. The disposal of these brands enables us to have even greater focus on the faster growing premium and above brands in the U.S. spirits portfolio."
New Orleans-based Sazerac increased its portfolio of brands in the deal. It recently purchased the Southern Comfort brand from Brown-Forman Co. and the Danish vodka brand Pris from Pernod Ricard. The deal, subject to regulatory approval, is expected to close in early 2019.