Diageo is expanding its portfolio by acquiring the Philippine rum brand Don Papa.
According to Diageo, the initial consideration is A$400 million and depending on performance until 2028, there may be an additional consideration of up to $273.5 million, to reflect the brand’s growth potential.
The deal will be funded from existing cash reserves and is expected to close in the first half of this year. Diageo said it would release further details about the purchase when it publishes its half-year results on January 26.
Don Papa Rum, founded in 2012 by entrepreneurs Stephen Carroll and Andrew John Garcia, is available in 30 countries, with France, Germany, and Italy being its most important markets.
“Diageo has a strong track record in nurturing founder-led brands. The company believes in our unique story and has genuinely embraced our brand idea,” said Stephen Carroll, founder of Don Papa Rum.
“We believe this acquisition is a great opportunity to take Don Papa into the next exciting chapter of its development.”
Stephen Carroll will continue to work with the brand, collaborating with Diageo to maximise Don Papa Rum’s growth potential.
Last year, Diageo purchased Mr Black, a fast-growing Australian brand that has grown to become one of the biggest premium coffee liquor brands in the US.
