Clooney's Casamigos Tequila bought by Diageo for 1 billion USD

George Clooney Casamigos

George Clooney’s Casamigos Tequila was bought by Diageo for 1 billion USD.

This is interesting because Casamigos:
– Started only 4 years ago in 2013;
– Sold 120,000 cases in 2016 and expect 170,000 cases in 2017, which is not sufficient for a 1 billion USD price (link);
– Has a bit over 120,000 Facebook page likes (link);
– Has almost 10,000 followers on Twitter (link);
– Has almost 85,000 followers on Instagram (link);
– Has 4 videos on Youtube totalling less than 650,000 views (link);
George Clooney is an owner and brand ambassador.

The 1 billion USD price was strange enough that the Diageo share price dropped (link). Eric Pfanner explained in his Bloomberg article: “Financial analysts frowned, saying the numbers don’t add up for the buyer, London-based distiller Diageo Plc. To some marketers, however, the deal made more sense.”

Conclusions are:
– Revenue and Social Media are not always a solid predictor of equity.
– Celebrity brands can increase brand equity and overall business equity drastically. If a business does not have a celebrity brand, it can create one like Elon Musk or Steve Jobs are.
– Diageo got a good deal if we consider that Nike paid Cristiano Ronaldo 1 billion for a lifetime sponsorship contract, meaning they did not buy Ronaldo’s brand, but rented a part of it.
– As global competition develops, soft values will matter more and we can expect more brand purchases which are hard to explain with basic numbers.