I bet that if ten years ago, you told George Clooney he was eventually going to build a billion-dollar tequila business, the actor would’ve laughed in your face.
Today, that’s exactly what Clooney has done, as Casamigos, the tequila company he created on a literal whim, was just sold to international distillery giant Diageo, with total proceeds having the potential to reach a billion dollars. Diageo will pay $700 million upfront for Casamigos, with an additional $300 million available based on how well the tequila performs over the next decade.
When Casamigos started out, it was never meant to be a business that sold tequila. The spirit was a private collection that Clooney and co-founder Rande Gerber developed after 700 different taste tests, the result being a tequila that didn’t have a burning aftertaste or left the two feeling hungover. However, they eventually were ordering enough bottles for themselves, friends, and family that they had to get licensed to continue making the alcohol. They brought in co-owner Michael Meldman at this point to help launch the company in 2013, which has since become one of the fastest-growing tequila brands in the country.
All three co-owners will stay on with Casamigos after the acquisition, which is expected to close in the second half of this year. Diageo doesn’t expect to begin making money on the tequila until the fourth year of owning the business, but the ultra-premium tequila, which goes for $45-$55 per 750 mL bottle, could very well be worth the investment.