India, Oct. 16 -- Four years after three friends decided to produce their own tequila for personal consumption, international beverage company Diageo agreed to acquire their brand for up to $1 billion. Announced in June 2017, the deal described Casamigos as "America's fastest-growing super-premium tequila." Under the agreement outlined in Diageo's official announcement, the company would pay $700 million upfront, with a further $300 million potentially payable based on the brand's performance over the following 10 years.

Rande Gerber, George Clooney, and Mike Meldman founded Casamigos in 2013. Its name means "house of friends" in Spanish. Diageo attributed the brand's growth to its smooth taste and strong appeal among consumers, noting t...