ISTANBUL - Diageo, world’s leading premium drinks business, reached agreement to acquire Mey Icki, the leading spirits company in Turkey, for an enterprise value of 3.3 billion Turkish lira (£1,300 million) from investment firm TPG Capital (TPG) and Actera.
A statement by Diageo said on Monday that the transaction was expected to complete in the second half of calendar 2011, subject to regulatory clearances.
It said, "Mey Icki is the leading spirits producer and distributor in Turkey. In the financial year ended December 31, 2010 the company had net sales of 766 million TL (£300 million) and EBIT of 305 million TL (£120 million). It is the clear market leader in Raki, the biggest spirits category in Turkey, and has a leading position in vodka. In addition the company has an extensive nationwide sales and distribution network."
The acquisition will add 1 percent to Diageo’s earnings per share in the first year of ownership, Diageo said. The deal will be funded through existing cash resources and debt.
"Turkey is a substantial fast growing economy with a growing and increasingly affluent middle class and consumer spending is forecast to be twice the rate of GDP growth. The acquisition of the leading spirits company in this very attractive emerging market will allow Diageo to accelerate the growth of its complementary international spirits brands with increased access through Mey Icki’s strong distribution network and customer relationships in Turkey. Mey Icki will be consolidated as part of Diageo Europe and will continue to operate under the current management team. They have delivered strong growth over the last 3 years and as part of the transaction they are investing a percentage of their equity into an employee incentive scheme," it said.
Diageo is the world’s leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine. These brands include Johnnie Walker, Crown Royal, JεB, Windsor, Buchanan’s and Bushmills whiskies, Smirnoff, Cîroc and Ketel One vodkas, Baileys, Captain Morgan, Jose Cuervo, Tanqueray and Guinness. Diageo is a global company, with its products sold in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE).