Diageo Abandons Cuervo Talks, Rio Tinto Divests Palabora Stake: Merger and Acquisitions Update
Diageo (DGEAF.PK) has abandoned discussions through which it would have bought Cuervo tequila and will now look to end its 26-year-old arrangement to distribute the brand, igniting speculation that it may search out a substitute. Diageo’s deal to distribute the tequila outside of Mexico is due to expire at the end of June. Analyst Anthony Bucalo at Groupo Santander thinks that Diageo might now aim at Beam (NYSE:BEAM), which owns the tequila brand Sauza.
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On Tuesday, the mining company Rio Tinto (NYSE:RIO) announced that it will divest its 57.7 percent effective interest in Palabora Mining Company (PBOAF.PK) for $373 million to a group of South African and Chinese concerns, which are led by the Industrial Development Corporation of South Africa and Hebei Iron & Steel Group. The transaction is subject to the usual regulatory approvals in South Africa and China, a process which could take between four and six months.
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