Bacardi to buy out Patron tequila in $5.1b deal

MEXICO CITY, Jan 23 (Reuters): Bacardi has agreed to buy out Patron Spirits International in a deal valuing the top high-end tequila maker at US $5.1 billion, highlighting the appetite big drinks groups have for the Mexican spirit.

The deal comes five months after Diageo bought George Clooney's Casamigos tequila for up to $1 billion.

Tequila sales, still largely confined to North America, are growing faster than the overall alcoholic drinks market as high-end brands help tequila shrug off its image as a party drink.

Patron, founded more than 25 years ago, was a high-end pioneer, but now competes with a range of brands such as Diageo's Don Julio, Pernod Ricard's Avion and Brown-Forman's Herradura.

Global tequila sales rose 5.2 per cent in 2016, according to research firm IWSR, while the overall market for alcoholic drinks fell 1.3 per cent.

Premium brands are outselling mass-market labels, as consumers increasingly look to "trade up" to more expensive drinks.