George Clooney's billion dollar tequila deal

Expensive Tequila

Casamigos, the tequila company owned by Hollywood star George Clooney and friends, has been sold to Diageo in a deal that could be worth up to $1 billion over the next ten years, CNBC reports. The beverage company agreed to buy Clooney's business for an initial sale of $700 million, with an extra $300 million possible dependent on sales over the next ten years. The deal is not expected to be finalized and closed until the second half of 2017. Diageo says that they do not expect the Casamigos to have an impact on it's earnings for three years.

According to CNBC, Clooney says "If you asked us four years ago if we had a billion dollar company, I don't think we would have said yes."

Clooney and his partners say they intend to remain a part of Casamigos (which means "house of friends") after the sale to Diageo. In an email to CNBC, Clooney says "We'll still be very much a part of Casamigos. Starting with a shot tonight. Maybe two."

Casamigos launched in the U.S. in 2013, after humble beginnings as a passion project between Clooney and friends, with no thought towards commerical distribution.

Casamigos, House Of Friends

Casamigos began as a private collection between Clooney and partners Rande Gerber in 2013, after Clooney bought property in Mexico neighboring Gerber.

About the history of the company, Gerber told Business Insider "Casamigos really started by accident as far as a company...As you do in Mexico, we would drink a lot of tequila. We'd go out to bars and restaurants, and bartenders would recommend them. Some were good, some not so good, and some expensive. There came a point where George turned to me and said, 'Why don't we create one that's perfect for us?'"

Over the course of the next few years the intrepid tequila lovers perfected their recipe and began to produce bottles for themselves—quite a lot of bottles.

The manner in which Casamigos went commercial speaks to just how much the friends love tequila: when Clooney and Gerber began ordering 1,000 bottles per year, they were informed that they would need a license.

Real estate tycoon Michael Meldman joined the team, and they soon launched their product in the United States. It became one of the fastest growing tequila brands in the world and has now been sold in 20 countries worldwide.

Stating that the three partners hardly need the money, Gerber says that their goal has been to keep the retail price down and bring top shelf tequila to the average buyer. A 750ml bottle of Casamigos retails for between $45 and $55.

Twitter was predictably tickled by the story.