Diageo (DEO) Acquires Gin Company Co-Owned By Ryan Reynolds In $610 Million Deal

By Amit Chowdhry ● August 17, 2020
  • Diageo plc (NYSE: DEO) announced it is buying gin company Aviation American Gin in a deal valued up to $610 million. Aviation American Gin is co-owned by actor Ryan Reynolds.

Diageo plc (NYSE: DEO) announced it is buying gin company Aviation American Gin in a deal valued up to $610 million. Aviation American Gin is co-owned by actor Ryan Reynolds — who is known for roles in films the Deadpool series, Van Wilder: Party Liaison, Pokémon Detective Pikachu, and The Hitman’s Bodyguard.

The company was originally founded by Christian Krogstad and Ryan Magarian in 2006. And Reynolds had acquired a stake in the brand from Davos in February 2018.

Diageo is known for owning iconic brands like Johnnie Walker, Bell’s, Lagavulin, Crown Royal, Smirnoff, Cîroc, Ketel One, Captain Morgan, Smirnoff Cocktails, Baileys, Sheridan’s, Don Julio, DeLeón, Casamigos, Tanqueray, Guinness, Tusker, Harp Lager, Kilkenny, Senator, and Meta Abo.

In 2017, Diageo had purchased the tequila brand Casamigos for $1 billion, which was co-founded by George Clooney. And Diageo is also known for partnering with Sean “Diddy” Combs for selling Cîroc back in 2007.

Aviation American Gin sells for $27 per 750 mL and it is known as the second largest super-premium gin brand in the U.S. The brand saw volumes at more than 100% in 2019, according to IWSR.

The $610 million deal is for Aviation Gin LLC and Davos Brands LLC. These companies also own brands like Astral Tequila, Sombra Mezcal, and TYKU Sake. Of the $610 million, there is an initial payment of $335 million and a further potential consideration of up to $275 million based on the performance of Aviation American Gin over a ten-year period. This acquisition will be funded through existing cash and is expected to close before the end of 2020, subject to regulatory clearances.

Reynolds also serves as the creative director for the brand and he will retain an ongoing ownership interest in Aviation American Gin. Recently, a commercial for the company recently went viral for featuring actress Monica Ruiz. Ruiz appeared in the gin ad a few days after she appeared in a commercial for Peloton Interactive that was criticized for being sexist. The Aviation Gin ad featuring Ruiz hit millions of views in the first day.

KEY QUOTES:

“We are delighted to announce this transaction, which supports our participation in the super premium gin segment in the United States. The acquisition of Aviation American Gin and the Davos Brands portfolio is in line with our strategy to acquire high growth brands with attractive margins that support premiumisation. We are confident that Aviation American Gin will continue to shape and drive the growth of super premium gin in North America and we are looking forward to working with Ryan Reynolds and the Davos Brands team to accelerate future growth.”

– Ivan Menezes, Chief Executive of Diageo

“A little over two years ago, I became an owner of Aviation Gin because I love the taste of Aviation more than any other spirit.  What I didn’t expect was the sheer creative joy learning a new industry would bring. Growing the brand with my company, Maximum Effort Marketing, has been among the most fulfilling projects I’ve ever been involved with. I want to thank Diageo for their incredible team and passion. We’re so excited for the next chapter of Aviation Gin, which, I promise, will require just as little reading.”

– Ryan Reynolds

“Brands are an evolution, reflecting the vision and values of their founders, sculptors and stewards.  Extraordinary partnership and teamwork brought us here, and with the continued creative genius of Ryan Reynolds, and this new, best in class global partnership with Diageo, the sky is truly the limit for Aviation American Gin and Davos Brands.”

– Andrew T. Chrisomalis, Co-Founder and CEO of Davos Brands

“I am excited by the opportunity to bring these brands into Diageo. We believe Aviation American Gin will play an important role in building on the long term premiumisation trends in the United States. The entrepreneurialism of the Davos team and Ryan Reynolds combined with Diageo’s strengths will help drive the continued momentum of the brand in North America and we feel confident that with Ryan’s global reach that Aviation Gin can expand internationally.”

– Debra Crew, President Diageo North America