Diageo has exchanged its majority stake in Cîroc vodka—a brand central to a legal battle with Sean “Diddy” Combs—for control of Lobos 1707, a tequila and mezcal label co-founded by LeBron James. The deal is part of a new joint venture with Main Street Advisors, the firm managing investments for James, Billie Eilish, and Arnold Schwarzenegger.

Diageo had been exploring a sale of Cîroc following the collapse of its partnership with Combs, who accused the company of racially motivated neglect of both Cîroc and DeLeón tequila in a 2023 lawsuit. Diageo countered that Combs failed to meet funding commitments. The matter was settled just ahead of a public trial. Since then, Combs has been charged with sex trafficking, charges he denies.

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Under the terms of the swap, Diageo will maintain global rights to Cîroc outside of North America. In 2024, Cîroc’s net sales dropped by 26%, making it the company’s poorest-performing major brand. The brand shift comes as Diageo faces increasing pressure from investors to improve financial performance amid stagnant global alcohol sales and rising consumer moderation.

In recent months, the company has offloaded underperforming labels such as Venezuelan rum Pampero and Dutch liqueur Safari, along with parts of its African brewing business. At its February update, Diageo scrapped its long-standing sales growth target, citing weak global demand and uncertainty over US tariffs.

Diageo North America chief Sally Grimes said the firm’s new venture with Main Street Advisors will revive Cîroc for a younger generation while boosting Lobos 1707’s growth.