Diageo, which was expected to buy a stake in Cuervo in a transaction that would allow it to later become its majority owner, said today the two parties were working towards ending their current distribution agreement, including transitional accords at the end of June 2013.
CEO Paul S Walsh said Diageo sees the future of Jose Cuervo to be best ensured by aligning ownership with its route to market and it has no doubt that Diageo has the best route to market for this brand. However, a deal that would provide value for Diageo shareholders could not be reached, the CEO added.
The Mexican brand, owned by Beckmann family, heirs to the Cuervo founding family, is valued at some USD3bn (EUR2.3bn), Reuters said.
Diageo is Cuervo’s main distributor outside Mexico.