Diageo (DEO) is acquiring high-end brand Don Papa Rum. Diageo, which owns brands such as Johnnie Walker and Tanqueray, has agreed to pay 260 million euros ($281M) for Don Papa. Depending on performance, DEO will pay up to 177.5 million euros through to 2028.
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Don Papa is in the super-premium rum category, according to Diageo’s press release. From 2016-2021, Don Papa boasted a CAGR of 27% in the U.S. and 18% in Europe.
DEO will fund the acquisition, which is expected to close in the first half of 2023, with existing cash reserves.
DEO stock has risen more than 4% year-to-date and has a Smart Score of 8, meaning it is likely to outperform the market. It has already started to rise in pre-market trading, in response to the news of the acquisition.
