Bacardi has agreed to buy out Patron Spirits International in a deal valuing the top high-end tequila maker at US$5.1bn.
The deal comes five months after Diageo plc (LON:DGE) bought George Clooney's Casamigos tequila for up to US$1bn.
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Patron, founded more than 25 years ago, was a high-end brand 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% in 2016, according to industry research, while the overall market for alcoholic drinks fell 1.3%.
Bermuda-based, family-owned Bacardi was founded in Cuba in 1862, selling its namesake rum. It now owns some 200 brands including Bombay Sapphire gin and Grey Goose vodka. It has owned a minority stake in Patron since 2008.
The acquisition marks the first major deal under Bacardi's Mahesh Madhavan, who was appointed chief executive in October. It is expected to close in the first half of 2018.