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Diageo Adds Peligroso to Portfolio

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Leading brewer Diageo plc (DEO) is geared to enrich its luxury alcohol portfolio and has taken over the super premium tequila brand, Peligroso, from California-based Peligroso Spirits Company, LLC.

Peligroso is the latest addition to the premium brands, following the DonJulio and DeLeón acquisitions. The acquisition is a strategic fit for Diageo, as it will give access to the growing super-premium tequila segment.

Peligroso, which originated in the highlands of Jalisco, Mexico, is a popular brand in the action sports and surfing culture of Southern California.

Peligroso comes in four variants — Cinnamon, Silver, Reposado and Anejo. The brand, with a retail price range of $30 to $55 per 750ml bottle, is distributed in 12 U.S. states.

The deal comes three weeks after the U.K.-based brewer formed a 50/50 joint venture with Combs Wine & Spirits to acquire the brand DeLeón on Jan 8, 2014. The joint venture was formed in 2007 to develop and grow the Cîroc ultra-premium vodka brand.

Diageo, which currently carries a Zacks Rank #3 (Hold), is a leader in the whiskey category. The company also commands a leading position both in the beer and vodka markets with a strong portfolio of globally recognized flagship brands, including Smirnoff, Johnnie Walker, Captain Morgan, Baileys and Guinness. Diageo betters its products through continuous innovations.

Another better-ranked stock in the same sector is Constellation Brands Inc. (STZ) sporting a Zacks Rank #1 (Strong Buy). Other stocks in the consumer staples sector worth considering are Green Mountain Coffee Roasters Inc. (GMCR) and ConAgra Foods Inc. (CAG). Both the stocks carry a Zacks Rank #2 (Buy).

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