Diageo completes deal for Bushmills

Diageo has completed its £200m purchase of Irish whiskey brand Bushmills as it continues to streamline its operations to focus its drinks business.

Bushmills was sold to Diageo by Pernod Ricard as part of a deal between the two spirits giants which cleared the way for Pernod's takeover of Allied Domecq without Diageo supporting any rival consortium.

Once the UK Office of Fair Trading had cleared the acquisition in mid-August, Diageo moved quickly to compete the Bushmills deal.

Sales of Irish whiskey have been growing at 3.8 per cent annually since 1998, with particularly strong growth in the US. Diageo sees the addition as reinforcing its Irish credentials, joining Guinness and Baileys in the portfolio.

Paul Walsh, chief executive of Diageo, said: "The acquisition of Bushmills is a particularly exciting opportunity. This is one of the industry's oldest Irish whiskey brands and gives Diageo, for the first time, an important presence in this growing category.

"Since 2000 Diageo has built a focused premium drinks company which is now a world leader. The business has grown organically and through targeted acquisitions and the Bushmills purchase continues this strategy.

"We believe Bushmills has huge growth potential and are looking forward to utilising our marketing expertise and distribution capabilities to move this brand into the global whisky market."

Diageo has also agreed options with investment bank Lehman Brothers over its remaining 25 million shares in US food company General Mills. The deal means Lehman Brothers will buy the shares at $51.56 per share in November, valuing Diageo's stake in the owner of cereal brands Cheerios and Lucky Charms at around $1.3bn.

The strategy to exit food interests has already seen Diageo sell its stake in fast food operation Burger King.