Diageo has reached an agreement to acquire Mey Içki, a leading spirits producer and distributor in Turkey, for a transaction value of approximately $1.8 billion from investment firm TPG Capital and Actera. The transaction is expected to be completed in the second half of this year, subject to regulatory clearances.
In the financial year ending Dec. 31, 2010, Mey Içki posted net sales of approximately $410 million. The company is the market leader in raki, the largest spirits category in Turkey, and also has a leading position in vodka. In addition the company has an extensive nationwide sales and distribution network.
The acquisition of a leading spirits company in Turkey’s emerging market will allow Diageo to accelerate the growth of its complementary international spirits brands with increased access through Mey Içki’s strong distribution network and customer relationships in Turkey, Diageo said. Mey Içki will be consolidated as part of Diageo Europe and will continue to operate under the current management team.
Paul Walsh, Diageo’s chief executive officer said, in a statement: “Turkey is an attractive, growing market for Diageo with strong GDP growth. The acquisition of Mey Içki transforms our existing position in this fast growing spirits market. It gives us leading brands in the major local spirits categories, a superior distribution network and a proven management team. The acquisition of Mey Içki will also provide Diageo with an outstanding platform from which to accelerate the long-term growth of our premium international spirits brands in Turkey.
“The acquisition meets our return criterion and delivers top-line growth above the Diageo average, and margin expansion. I am delighted to welcome the Mey Içki brands and management team to Diageo.
“This investment represents the continuation of our strategy to increase Diageo’s presence in those emerging markets, such as China and Vietnam, which have a rapidly growing middle class.”
Did you enjoy this article? Click here to subscribe to Beverage Industry