Diageo to buy Brazil's most popular rum brand Ypioca for $469 million

Diageo Plc, the world's largest maker of alcoholic drinks, today said it is buying a maker of Brazil's most popular rum brand Ypioca, for about £300 million ($469 million), to aid its expansion in the fast-growing emerging markets.

London-based Diageo, whose products include Johnnie Walker, Bell's, Smirnoff vodka, Guinness and Gordon's Gin among many others, will buy Cachaca or rum brand Ypioca and some production assets from Ypioca Agroindustrial Limitada for 900 million reais in cash, and complete the transaction in about a month.

Cachaca, also known as Brazilian rum, is made from fermented sugar cane juice and when mixed with lime, sugar and ice, makes the Brazilian caipirinha cocktail. It is Brazil's most popular liquor.

Ypioca, which is the second-largest brand by value and third-largest by volume, had annual sales of about 177 million reais in 2011.

''Brazil is an attractive, fast-growing market for Diageo with favourable demographics and increasing disposable incomes,'' said Paul Walsh, Diageo's CEO. The purchase will boost Diageo's revenue growth, he added.

Diageo, formed through the1997 merger of Guinness plc and Grand Metropolitan plc, is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine.