Diageo has agreed to buy George Clooney's high-end tequila brand Casamigos in a deal valuing it at up to $1 billion.

The world's largest spirits maker is seeking to boost its presence in a high-growth market. 

Diageo said it would pay $700m initially for the company, co-founded by the American actor, with potential payment of a further $300m linked to performance over 10 years. 

The deal comes two weeks after Pernod Ricard took a stake in mezcal maker Del Maguey, and highlights the opportunity companies see in Mexico's native spirits. 

A new spate of high-end tequilas has helped the drink transcend its traditional image as a party beverage for young drinkers. 

Its sales rose 5.2% globally last year, according to data tracker IWSR, outperforming a spirits industry that edged up only 0.3%. 

Casamigos, which means "house of friends," was founded in 2013 by Clooney and his friends - nightlife entrepreneur Rande Gerber, who is married to model Cindy Crawford, and real estate developer Mike Meldman. 

They will continue to promote the brand.

Diageo, which has arrangements with other celebrities including David Beckham and Sean Combs, said Casamigos will be neutral to earnings for the first three years and add to earnings thereafter. 

The brand sold 120,000 9-litre cases in 2016, mainly in the US, and is on track to reach over 170,000 by the end of the year. 

Diageo said expanding the brand to Europe would be a source of future growth.

The company did not provide revenue or earnings figures for the business. 

Its North American president, Deirdre Mahlan, told reporters that companies like Casamigos, which are growing fast with lots of room ahead, were "notoriously challenging to value under traditional methods". 

When asked about rising tensions between Mexico and the US, Mahlan said she did not anticipate any barriers that would stop Diageo from continuing to grow its business. 

Diageo's other tequila brands include Don Julio, DeLeon and Peligroso. 

It distributed Jose Cuervo outside of Mexico until 2012, following its failure to strike a deal to buy it outright from the brand's founding family.

The Casamigos deal is expected to close in second half of the year.