Diageo acquires Premium Filipino Rum Brand Don Papa for P15 billion

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Diageo, a multinational beverage company, announced that it would purchase the premium Filipino rum brand Don Papa for an initial payment of €260 million (about P15.48 billion). According to Diageo, “depending on performance,” the agreement might be worth up to €177.5 million more through 2028.

Don Papa started in 2012 by Andrew John Garcia and Stephen Carroll, an Englishman. While on vacation in the Philippines, namely at the center of the sugar cane farm Hacienda Sta Rosalia in the rural Negros Occidental region, Carroll came up with the idea for the spirit. Then he understood that there was no rum being made in this region of the country amid all that sugar.

In a little more than ten years, Don Papa has flourished, expanding to 30 countries globally, with France, Germany, and Italy serving as its three biggest markets.

The compound annual growth rate (CAGR) for ultra premium rum was 18% in Europe and 27% in the United States between 2016 and 2021, indicating the corporation is optimistic about the product’s future. With a 29 percent CAGR throughout the same time frame, Don Papa Rum continuously surpassed the European market.

John Kennedy, head of 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.”

Carroll noted that “Diageo has a strong track record in nurturing founder-led brands,They believe in our unique story and have 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.”

Carroll will continue to be connected with the brand, according to Diageo, and will collaborate with the company to maximize Don Papa Rum’s potential for growth.

The acquisition will be paid for with already-existing cash reserves, according to Diageo, which has a portfolio of more than 200 brands and its headquarters in London. The transaction is anticipated to completion in the first half of 2023.

Johnnie Walker, Crown Royal, and J.B. whiskies, Smirnoff, Cîroc, and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness are just a few of Diageo’s products.

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