Diageo in US$2.1b takeover

08:47, February 22, 2011      

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The world's biggest spirits maker, Diageo Plc, yesterday agreed to buy the Turkish spirits group Mey Icki for 1.3 billion pounds (US$2.1 billion) to give it access to this fast-growing emerging market.

The London-based maker of Johnnie Walker whisky and Smirnoff vodka is buying Turkey's biggest spirits company from investment firms TPG Capital LP and Actera. The deal is expected to be completed in the second half of 2011.

The Turkish group is the clear market leader in raki, the biggest spirits category in Turkey, and has a leading position in vodka, while it also has an extensive nationwide sales and distribution network.

It had net annual sales of 300 million pounds in 2010 and earnings before interest and tax of 120 million pounds, and will be earnings accretive for Diageo in the first full year of acquisition by around one percent.

The British group said the deal will allow it to accelerate the growth of its international spirits brands in Turkey.

"Turkey is an attractive, growing market for Diageo with strong GDP growth. The acquisition of Mey Icki transforms our existing position in this fast growing spirits market," said Diageo Chief Executive Paul Walsh.

Source: Shanghai Daily
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