Diageo has reached an agreement to acquire Don Papa Rum, a premium, dark rum from the Philippines which is currently available in 30 countries. The upfront consideration for the deal came out at €260 million with a further potential consideration of up to €177.5 million through to 2028, subject to the company’s performance and its current growth potential, according to Diageo in a press release.
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The acquisition will also be funded through existing cash reserves and is expected to close in the first half of 2023. Founded in 2012 by entrepreneurs Stephen Carroll and Andrew John Garcia, Don Papa is a hot favorite with France, Germany and Italy coming out as its biggest fans with the largest markets. With a unique flavor profile and highly distinctive packaging, the rum, which is distilled and aged on the island of Negros Occidental, consistently outperforms in the European market.
“We are excited by the opportunity to bring Don Papa into the Diageo portfolio to complement our existing rums. This acquisition is in line with our strategy to acquire high growth brands with attractive margins that support premiumisation, and enables us to participate in the fast-growing super-premium plus segment,” said John Kennedy, the president of Diageo Europe and India.
Diageo, which is primarily known for its popular Captain Morgan brand, also has brands such as Baileys Irish Cream and Johnnie Walker under it. “Diageo has a strong track record in nurturing founder-led brands. They believe in our unique story and have genuinely embraced our brand idea. We believe this acquisition is a great opportunity to take Don Papa into the next exciting chapter of its development,” said Carroll.
Carroll is set to remain involved with the brand and will work alongside Diageo as they build upon Don Papa Rum’s growth potential.
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