Announcing the landmark agreement, the global alcoholic drinks firm, which is based in Scotland, said it would help to boost its position in international top quality tequila markets globally.
The already well-positioned Tequila Don Julio brand would also strengthen Diageo’s presence in the important tequila market in Mexico, it claimed.
Gaining full ownership and distribution rights for Tequila Don Julio and Tres Magueyes, alongside the ‘La Primavera’ distillery, inventory and agave supply would enable it to invest in the brand to improve its competitiveness, said Diageo.
“I am delighted to have completed this acquisition which delivers on our strategy to build our presence in the world’s fastest growing markets and to invest behind the biggest growth opportunities,” said Diageo ceo Ivan Menezes.
“Tequila is an important global category with tremendous growth potential and with the purchase of Tequila Don Julio we now have full ownership of a leading ultra-premium brand.”
Erik Seiersen, md of Diageo Mexico, added: “This transaction marks a significant milestone for Diageo in Mexico.
“It transforms our business as a leading local employer, producer, and exporter of one of Mexico’s most important products and reinforces our leading position within premium spirits with the return of Smirnoff and the addition of Tequila Don Julio in its entirety to our portfolio.”
Under the terms of the transaction, which was announced in November, Diageo agreed to sell its Bushmills Irish whiskey brand to Jose Cuervo Overseas in return for full ownership of Casa Cuervo’s Don Julio and $408M (£255M).
Diageo already held a 50% stake in Don Julio and the move sees it take on the other 50%.
“It feels sad to see Bushmills go,” Phil Carroll, beverages analyst at Shore Capital, told FoodManufacture.co.uk at the time. “But, based on the numbers they have given us, on face value it seems a reasonable valuation for Bushmills.”