Diageo, the world's biggest spirits maker, has confirmed a deal to buy the Turkish spirits group Mey Icki for £1.3bn 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 agreement 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 £300m in 2010 and earnings before interest and tax (EBIT) of £120m, and will be earnings accretive for Diageo in the first full year of acquisition by around 1 percent.
The group said the deal will allow it to accelerate the growth of its international spirits brands in Turkey through
Mey Icki's distribution network and customer relationships.
"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 in a statement.
City A.M. Reporter