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DIAGEO TO ACQUIRE FILIPINO PREMIUM RUM BRAND DON PAPA FOR UP TO EUR437.5M

By Susan Lewis

17-1-2023



Source: Don Papa Rum/Instagram

Global wine and spirits giant Diageo has decided to acquire Filipino premium rum brand Don Papa for EUR260 million (USD282m) to bolster its premium rum portfolio.

Expected to be completed in the first half of 2023, Diageo said the acquisition will be funded through existing cash reserves.

The deal, which includes a potential consideration of an additional EUR177.5m in performance-related add-ons, could cost Diageo up to EUR437.5m.

“We are excited by the opportunity to bring Don Papa into the Diageo portfolio to complement our existing rums,” said John Kennedy, president, Diageo Europe and India.

“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,” said Kennedy.

Don Papa Rum’s founder Stephen Carroll believes that Diageo is the right company to take the brand to the next level due to its “strong track record in nurturing founder-led brands.”

“Diageo believes in our unique story and has 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,” said Carroll, who will remain involved with the brand, working alongside Diageo.

Founded in 2012, Don Papa Rum is available in 30 countries, with France, Germany and Italy being its largest markets.

The rum is distilled and aged on the island of Negros Occidental, the third most populous island in the Philippines and a big producer of sugar canes.

The company said the combination of local sugar cane, American oak barrels and the island’s hot tropical climate gave Don Papa Rum its distinctive flavour, with notes of vanilla, honey and candied fruits.

Currently, Diageo’s rum portfolio includes the mainstream Captain Morgan brand and the high-end Guatemalan Ron Zacapa brand. The group also owns a stake in Caribbean brand Ten to One through its US-based Pronghorn incubator, which backs Black-owned spirits brands.

(the writer can be contacted at: info@thewinechronicle.com)

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