(Photo: Diageo)
On Thursday, Bloomberg reported that British spirits firm Diageo is approaching potential buyers for Cîroc Vodka, the brand formerly co-owned by disgraced music mogul Sean "Diddy" Combs.
According to "people familiar with the matter," the company is in the early stages of gauging interest among beverage companies and buyout firms. The report has yet to be confirmed by Diageo's upper management, and Bloomberg adds that the considerations "may not lead to a transaction."
At its height, Cîroc was one of the most prolific spirits brands in America. Thanks in large part to endorsement deals and frequent sightings in music videos, the brand's laundry list of flavored vodkas, pre-mixed cocktails and cognac expressions once dominated the liquor store shelf.
But the brand has come a long way since its peak in 2015. Cîroc witnessed a 28% sales plunge in North America last year, a drop that many have attributed to its close association with Combs. In the months before his buyout from the brand, Combs waged a highly publicized legal battle against Diageo, accusing the company of racial discrimination in its handling of Cîroc and another jointly owned brand, DeLeón Tequila.
Combs retracted his lawsuit in January following the first in a wave of graphic misconduct allegations. Diageo became one of many companies including Revolt TV, Macy's, Capital Prep Charter School and Nuudii System to cut ties with the billionaire, who now awaits trial in New York on over two dozen sexual assault suits.
“Sean Combs and Diageo have now agreed to resolve all disputes between them. Mr. Combs has withdrawn all of his allegations about Diageo and will voluntarily dismiss his lawsuits against Diageo with prejudice,” both parties said in a joint statement. “Diageo and Mr. Combs have no ongoing business relationship, either with respect to Cîroc vodka or DeLeón tequila, which Diageo now solely owns.”
According to an investor's report, Combs was bought out of his 50% stake in DeLeón Tequila for $200 million. The terms of the Cîroc buyout were not disclosed, though it stands to reason that the vodka — historically the more profitable of the two brands — would've demanded a higher asking price.
Were Diageo to sell Cîroc, it would be the latest in a trend. Following a series of gloomy earnings reports released throughout the year, the company has attempted to cut large swathes of its portfolio including Pimm's, Pampero Rum and Safari Fruit Liqueur. Diageo reportedly hopes to focus on a smaller roster of premium brands including heavy hitters like Don Julio and Johnnie Walker.
In addition to Cîroc, the spirits conglomerate owns leading vodka brands Smirnoff and Ketel One.
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