George Clooney, Rande Gerber Sell Tequila Business For $1 Billion

MALIBU, CA — Actor George Clooney and businessman Rande Gerber have sold their tequila business to British spirits company Diageo, it was announced Wednesday.

Clooney and Gerber, who is married to supermodel Cindy Crawford, along with real estate tycoon Michael Meldman started the super-premium tequila Casamigos in 2013. It was previously a private label meant for friends of the trio, which is reflected in the name — Spanish for "House of Friends."

"We are extremely excited to team up with one of the largest, most respected spirits companies in the world,” Gerber said in a statement. "What started from a friendship and an idea to create the best-tasting, smoothest tequila as our own house tequila to drink and share with friends, has quickly turned into the fastest growing super-premium tequila."

The deal is initially worth $700 million, but the trio could make another $300 million if the brand does well in the next 10 years, making the deal worth a potential $1 billion. Since its inception, Casamigos has received numerous awards and accolades from tequila experts. In 2016, the company sold 120,000 cases, and it is on track to sell more than 170,000 cases this year.

“With the global strength of Diageo we expect to expand the reach of Casamigos to markets beyond the US to capitalise on the significant international potential of the brand," Diageo CEO Ivan Menezes said in a statement. "We look forward to building on the remarkable success of Casamigos to date."

Diageo does not expect the acquisition to affect its earnings potential for the first three years, and the Casamigos brand is expected to start making money in the fourth year. The deal is expected to be finalized by the second half of this year.

Clooney, Gerber and Meldman are expected to stay on with the company after the acquisition.

AP Photo/Andrew Medichini