Spirits giant Diageo has announced that it has reached an agreement to acquire Don Papa Rum, a super-premium dark rum from the Philippines.
The Johnnie Walker owner added that the upfront consideration for the deal is €260 million, with a further potential consideration of up to €177.5 million through to 2028 subject to performance.
John Kennedy, president of Diageo Europe and India, commented, "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."
Diageo said that it will fund the acquisition through existing cash reserves and is expected to close the deal in the first half of 2023.
With a compound annual growth rate (CAGR) of 18% in Europe and 27% in the US between 2016-2021, the super-premium plus segment of the rum category is in the early stages of premiumisation, Diageo added.
In this period, Don Papa Rum delivering a 29% CAGR in Europe, outperforming the market.
Don Papa Rum
Launched in 2012 by entrepreneur Stephen Carroll and Andrew John Garcia, Don Papa Rum is available in 30 countries, with France, Germany and Italy being its biggest markets.
The rum is distilled and aged on the island in American oak barrels.
Carroll commented, "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."
Stephen Carroll will remain with the brand and work alongside Diageo to build on Don Papa Rum’s growth potential.
© 2023 European Supermarket Magazine – your source for the latest drinks news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
