George Clooney is selling his tequila company to Diageo for as much as $1 billion, the company announced on Wednesday. But Clooney and business partner Rande Gerber didn't set out to make money by launching Casamigos Tequila.

While building their side-by-side vacation homes in Cabo San Lucas, the long-time friends were spending a lot of time in Mexico — and consequently, drinking a lot of tequila.

"As you do when you're in Mexico, you drink a lot of tequila," Gerber tells CNBC. "After a couple of months trying a lot of different tequilas, George turned to me and said, 'Why don't we just make our own? One that's perfect for us to drink?'"

That's just what the pair did, along with their friend Michael Meldman.

The team found a distiller in Jalisco, Mexico, and explained exactly what they were looking for. "It was important that it tasted great and didn't burn going down," Gerber explains. "We wanted one that we could drink straight or on the rocks. One that we could drink all day and all night, and not be hungover in the morning."