British beverage alcohol producer Diageo has agreed to acquire Aviation Gin and Davos Brands for a maximum consideration of $610m.

Under the deal, Diageo will make an initial payment of $335m, while the remaining $275m will be paid to the company based on the performance of Aviation American Gin over ten years.

Diageo chief executive Ivan Menezes said: “We are delighted to announce this transaction, which supports our participation in the super-premium gin segment in the US.

“The acquisition of Aviation American Gin and the Davos Brands portfolio is in line with our strategy to acquire high growth brands with attractive margins that support premiumisation.

“We are confident that Aviation American Gin will continue to shape and drive the growth of super-premium gin in North America and we are looking forward to working with Ryan Reynolds and the Davos Brands team to accelerate future growth.”

With this deal, Diageo will own Aviation American Gin, a brand produced using a blend of botanicals offering subtle juniper notes.

Davos Brands is the majority owner of Aviation American Gin, while Canadian film actor Ryan Reynolds also owns a stake.

Upon completion of the deal, Reynolds will retain his stake in the gin brand.

Reynolds said: “A little over two years ago, I became an owner of Aviation Gin because I love the taste of Aviation more than any other spirit.  What I didn’t expect was the sheer creative joy learning a new industry would bring.

“Growing the brand with my company, Maximum Effort Marketing has been among the most fulfilling projects I’ve ever been involved with. I want to thank Diageo for their incredible team and passion. We’re so excited for the next chapter of Aviation Gin, which, I promise, will require just as little reading.”

The deal will also enable Diageo to acquire other brands in the Davos Brands’ portfolio such as Astral Tequila, Sombra Mezcal, and TYKU Sake.

Diageo said that it will fund the acquisition through existing cash.

Completion of the deal should take place at the end of this year, subject to regulatory approvals.

In January, Diageo’s Distill Ventures made a minority investment in US-based Ritual Zero Proof.

Ritual Zero Proof is reportedly the first American company to produce spirit alternatives, which taste and smell similar to spirits.