Diageo to acquire Brazilian rum brand
Drinks giant Diageo is set to buy Ypioca, one of Brazil's largest cachaca brands in Brazil, the company announced on Monday.
Drinks giant Diageo is set to buy Ypioca, one of Brazil's largest cachaca brands in Brazil, the company announced on Monday.
Diageo, which already owns well-known brands such as Smirnoff and Guiness, said it has reached an agreement with Ypioca Agroindustrial Limitada to purchase its white rum brand for 900m Brazilian real, or £300m, in cash.
Cachaca is the largest spirits category in Brazil and Ypioca is number two by value and number three by volume. The business had net sales of BRL 177m (£60m) in 2011.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"Brazil is an attractive, fast growing market for Diageo with favourable demographics and increasing disposable incomes. The acquisition of Ypioca gives us the leading premium brand in the largest local spirits category. It will also provide Diageo with an enhanced platform from which to accelerate the long term growth of our premium international spirits brands in Brazil," said Diageo's Chief Executive Officer Paul Walsh.
"This investment represents the continuation of our strategy to increase Diageo's presence in the fastest growing economies of the world," he said.
The acquisition is expected to earnings per share neutral in the first year and economic profit positive by year five.
BC
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
UK-US trade deal announced: US cuts tariffs on UK car imports to 10%
Keir Starmer and Donald Trump have announced a UK-US trade deal, but the US president has refused to lift baseline tariffs on most UK goods. What does it mean for the UK?
-
How to use mid-caps to diversify from the US
Medium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.