Diageo explores sale of Cîroc Vodka brand, potential buyers contacted - Bloomberg

Investing.com -- British spirits group Diageo (LON:DGE ) Plc is considering the sale of Cîroc Vodka, a brand previously associated with music mogul Sean “Diddy” Combs, according to a report from Bloomberg. The company has initiated contact with potential buyers, including beverage companies and buyout firms, to assess their interest. However, these considerations are in the early stages and may not result in a transaction.

Diageo's exploration of a Cîroc sale follows the resolution of a lawsuit with Combs in January. Combs had accused the spirits company of neglecting Cîroc Vodka and another liquor brand, DeLeón Tequila, alleging racial bias. He later withdrew his allegations, and the business relationship was terminated.

Diageo has declined to comment on the potential sale. The company, which also owns Johnnie Walker whisky, has been divesting assets as part of its strategic portfolio management. In July, Diageo agreed to sell Pampero rum and Safari flavored liqueur.

The company has faced challenges in the past year, with a slowdown in Chinese demand for high-end spirits and weak sales across much of the Americas. The slowdown has posed difficulties for Chief Executive Officer Debra Crew, who took over last year. Diageo's net sales in the fiscal year through June fell 1.4%, and its shares have declined about 12% in London trading this year.

The sale of Cîroc may be complicated by its past association with Combs and declining revenue. Net sales of Cîroc fell 28% in North America for the fiscal year ending in June, according to Diageo’s annual report. However, the brand's strong presence in nightclubs could attract certain bidders who see turnaround potential.

In addition to Cîroc, Diageo also owns other vodka brands including Smirnoff and Ketel One.

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Source: Investing.com