Casamigos Diageo Deal: How a Friends-Only Tequila Sold for Up to $1 Billion

Three friends made a house tequila, started selling it in 2013 and sold it to Diageo four years later. Here are the deal terms, the earn-out structure, what has happened to the brand since and the lessons for founders.

The Casamigos Diageo deal turned a tequila that George Clooney, Rande Gerber and Mike Meldman first made for themselves into a sale worth up to $1 billion in 2017. Diageo paid $700 million at the outset and promised up to $300 million more if the brand hit sales targets. Nine years on, the same brand is losing sales inside Diageo, which makes the story useful for founders on both sides of an exit.

From house pour to company: the Casamigos timeline

Casamigos was not built to be sold. NPR reported that the friends worked with a distiller in Jalisco, Mexico, on a tequila for their own use and made roughly 1,000 bottles a year, until the distiller told them they needed a license. Only then, Gerber said, did they reluctantly form a company.

Year Milestone
2013 Company formed; first bottles in stores (NPR)
2016 120,000 cases sold, mostly in the U.S.
2017 Diageo agrees to buy for up to $1 billion
2018 Forbes credits Clooney with $239M of earnings
Fiscal 2025 Net sales down 18% (Diageo)
Fiscal 2026 Net sales down 27.7% (Diageo)

The brand still tells that origin story. Its own site describes something made by friends for friends that grew into an award-winning brand.

The deal terms, per Diageo

Diageo announced the purchase in June 2017, and NPR summarized the release: an upfront payment of $700 million and a further payment of up to $300 million tied to sales targets. In its announcement, Diageo cited 2016 volume of 120,000 cases and forecast more than 170,000 for 2017. Gerber, quoted in the release, called it the fastest-growing super-premium tequila.

The $300 million piece is an earn-out: part of the price paid later, only if the business performs. It protects the buyer if growth stalls and rewards sellers who keep building after the sale. That is also why the founders’ continued role mattered. Per NPR, all three committed to remain the brand’s public face and leaders after closing.

Diageo did not say how the money was split among the three founders, and none has disclosed a personal share. Forbes’s view of the result for one of them came the next year: it put Clooney’s 2018 earnings at $239M, a sum it said no actor had ever topped in a single year.

The business model: a premium brand with a celebrity sales force

Casamigos paired a premium product with famous founders who kept promoting it. NPR noted that Casamigos would join a Diageo portfolio that already included Don Julio tequila. Inside Diageo, the brand has since been stretched into new formats: a ready-to-drink margarita that Diageo launched in key U.S. states at the end of its 2025 fiscal year, and a canned version the brand page says comes in five U.S. flavors. Diageo also signed Casamigos up as a tequila sponsor of the 2026 FIFA World Cup, its brand page says.

The product range has widened well beyond the original bottle. The brand’s home page now lists tequilas, a mezcal, the canned Casamigos Margarita and a line of pre-mixed Crafted Cocktails, and claims more than 50 awards in 2025. For a founder, the takeaway is that a buyer with distribution muscle will try to stretch a brand into adjacent formats, which can protect volume when the core product slows.

What went wrong after the sale

The growth that justified the price has reversed. Diageo’s fiscal 2025 results said Casamigos net sales fell 18% as tequila competition reduced demand, even while Diageo’s tequila business overall grew on the strength of Don Julio. In fiscal 2026, the whole category turned: Diageo’s tequila sales fell 21.1%, Casamigos net sales fell 27.7%, and depletions, the sales from distributors to stores, dropped 23.1%. Diageo said both of its tequila brands lost share.

Diageo’s response is a price repositioning plus a refreshed marketing campaign. On write-downs, its fiscal 2026 report itemized impairment charges on several brands, including Don Papa rum, Aviation American Gin and Ypióca, but did not name Casamigos. We have not found a Diageo filing that records a Casamigos impairment, so we do not describe one.

What Diageo got for its money

Diageo’s tequila results show how the purchase fits its wider portfolio. Even in fiscal 2025, when Casamigos was already shrinking, Diageo’s tequila sales rose 16.9% because Don Julio surged. The two brands then fell together in fiscal 2026. Diageo reported Don Julio net sales down 19.2%, with depletions down 10.1%, so Casamigos’ decline was steeper on both measures.

The founders have stayed visible. In April 2024, a Forbes contributor wrote, the trio appeared alongside Cindy Crawford to introduce a jalapeño tequila under the Casamigas name, a sign that the promotional role agreed in 2017 continued long after the sale.

Casamigos Diageo lessons for founders

  • Sell into momentum. The founders sold while case volumes were climbing fast. The same brand, measured in 2026, would tell a very different story to a buyer.
  • Understand the earn-out. $300 million of the up-to-$1 billion headline depended on future sales. Founders should model what they receive if growth slows, not only the ceiling.
  • Founder involvement is part of what is sold. The deal kept all three founders promoting the brand. A celebrity-led company is worth less if the celebrity walks away.
  • Category risk outlives the deal. The tequila slowdown that hit Casamigos also hit Don Julio. No amount of founder fame offsets a cooling category.

Two other celebrity-brand exits make useful comparisons: T-Mobile’s purchase of Mint Mobile and the Honest Company IPO.

Frequently Asked Questions

How much did Diageo pay for Casamigos?

Diageo agreed in June 2017 to pay $700 million up front plus up to $300 million more if Casamigos hit sales targets, for a total of up to $1 billion, according to NPR’s report on the Diageo announcement.

Who founded Casamigos?

George Clooney, Rande Gerber and Mike Meldman. NPR reported that Clooney and Gerber started it in 2013 and named Meldman as the third founder.

Does George Clooney still own Casamigos?

No. Diageo owns the brand after the 2017 deal; the three cofounders stayed on as promoters and brand leaders, and they have since appeared at launches for it.

Has Diageo written down Casamigos?

Diageo’s fiscal 2025 and 2026 results did not list Casamigos among the brands it impaired. They did report falling Casamigos sales, down 18% and then 27.7%.

Why are Casamigos sales falling?

Diageo blamed tougher competition and a softer tequila category, and said in 2026 that it was repositioning the brand’s price and refreshing its marketing.

Sources

This article is general information for founders and is not accounting, legal or investment advice. Net worth figures are estimates published by the outlets named, on the dates shown. They are not disclosed by the people profiled, they move with markets and private valuations, and different publications reach different numbers. Found Founders is not affiliated with anyone profiled here.