Diageo to buy Turkish spirits company

Drinks giant Diageo said today it has reached agreement to acquire Mey Içki, the leading spirits company in Turkey, for around TL3.3bn (€1.5bn).

The transaction is expected to complete in the second half of calendar 2011, subject to regulatory clearances.

Mey Içki, owned by investment firm TPG Capital (TPG) and Actera, is the leading spirits producer and distributor in Turkey.

In the financial year ended December 31, 2010 the company had net sales of TL766m (€354m) and EBIT of TL305m (€141m).

It is the clear market leader in Raki, the biggest spirits category in Turkey, and has a leading position in vodka, Diageo said.

The acquisition will be funded through existing cash resources and debt.

"Turkey is an attractive, growing market for Diageo with strong GDP growth," said CEO Paul Walsh.

"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."