Company News » Diageo gobbles up Turkish drinks firm

Diageo gobbles up Turkish drinks firm

Diageo is to buy Mey Içki for £1.3bn

SHARECAST – Spirits brands giant Diageo is to buy Mey Içki, the leading spirits producer and distributor in Turkey.

The company is being acquired for an enterprise value of TL3,300m (£1.3bn) from investment firm TPG Capital and Actera. The transaction is expected to be complete in the second half of 2011, subject to regulatory clearances.

In the financial year ending 31 December 2010, Mey Içki had net sales of TL766m (£300m) and earnings before interest and tax (EBIT) of TL305m (£120m). Diageo expects the acquisition will boost earnings per share by around one percent in the first year of ownership.

The acquired company 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.

Mey Içki 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 three years and as part of the transaction they are investing a percentage of their equity into an employee incentive scheme,” the statement said.

Paul Walsh, chairman of Guinness brewer Diageo, said Turkey is an attractive, growing market with an increasingly affluent middle class.

“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,” said Walsh.

Read Financial Director’s December 2009 interview with Diageo Scotland FD, Richard Bee, here

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