Diageo has agreed to buy Philippines-based rum brand Don Papa.
The multinational drinks company will pay EUR260 million with a further potential consideration of EUR177.5 million through to 2028, subject to the brand’s performance.
John Kennedy, president, Diageo Europe and India, said: “We are excited by the opportunity to bring Don Papa into the Diageo portfolio to complement our existing rums. 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.”
Citing IWSR, Diageo said the super-premium plus segment of the rum category is in the “early stages of premiumisation”, with a compound annual growth rate (CAGR) of 18% in Europe and 27% in the US between 2016-2021.
“Through the same period, Don Papa rum consistently outperformed the market in Europe, delivering a 29% CAGR,” the company said.
Don Papa was launched in 2012 by Stephen Carroll and Andrew John Garcia, and it is currently available in 30 countries.
It joins a Diageo rum portfolio that includes Captain Morgan, Zacapa, Pampero and Bundaberg.
The deal is expected to close in the first half of 2023.