George Clooney’s tequila brand, Casamigos, is being bought by Diageo.
The large spirits and beer retailer announced the agreement last Wednesday, making Clooney one of the most successful celebrity investors.
Diageo is paying an initial amount of $700 million for Casamigos, and it’s potentially paying another $300 million if the tequila meets sales targets over next ten years.
Casamigos translates to ‘house of friends’ in Spanish, and the Diageo site says the tequila is made “by friends for friends.”
Casamigos was founded in 2013 by Clooney and two of his friends, Rande Gerber and Mike Meldman. Though uncommon, the company didn’t stem from a desire to make money. The three founders just wanted to make a personal, customized tequila.
“As you do when you’re in Mexico, you drink a lot of tequila,” Gerber said to CNBC. “After a couple of months trying a lot of different tequilas, George turned to me and said, ‘Why don’t we just make our own? One that’s perfect for us to drink?'”
Casamigos tequila was an exclusive company for quite a while, for two years it was only served to Gerber and Clooney’s friends and families.
Clooney and Gerber were ordering about 1,000 bottles a year from their distiller, but at that volume, Casamigos could no longer be considered a ‘sample.’ The distiller told Clooney and Gerber that if they wanted to keep drinking it, they needed to get licensed.
That ultimatum sparked the creation of a million dollar company.
“We wanted to keep drinking it,” Gerber said.
Casamigos tequila now sells for around $50 a bottle, bringing in $70 million in 2016 revenue at retail.
Clooney, Gerber, and Meldman are expected to stay with the company, even after it’s acquired by Diageo.
“We’ll still be very much a part of Casamigos,” Clooney said in an email to CNBC. “Starting with a shot tonight. Maybe two.”
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