Diageo PLC (LSE:DGE) is reportedly considering the sale of Ciroc Vodka, the drinks brand backed by disgraced music mogul Sean “Diddy” Combs.
According to sources cited by Bloomberg, FTSE 100-listed Diageo has contacted potential buyers, including beverage companies and private equity firms, to gauge interest in the brand.
Diddy, who is currently incarcerated on sexual abuse and trafficking crimes, entered into a partnership with Diageo in 2007 to help promote Ciroc in exchange for a 50% share of the profits.
In 2023, Diddy filed a racial discrimination lawsuit against Diageo, thus ending their partnership.
Ciroc sold 1.4 million cases and generated retail sales of $1.47 billion in 2023, but sales have plummeted in 2024.
In a research note, broker Jefferies estimated the sale could add more than 50 basis points to Diageo’s group growth while diluting earnings per share by less than 1%.
2024 has been tough for Diageo, with shares falling 11% year to date.
But Jefferies analysts cited optimism in the stock going forward.
They said: “Companies do not change overnight; however, we think that Diageo will start to look different as confidence in spirits growth increases and under a new, heavyweight CFO, where we expect to see a renewed focus on growth, profit and cash.”