FDBusiness.com

Diageo has reached agreement to acquire Mey Icki, the leading spirits company in Turkey, for an enterprise value of £1.3b from investment firm TPG Capital and Actera. The transaction is expected to complete in the second half of calendar 2011, subject to regulatory clearances.

Paul Walsh, chief executive of Diageo.

Mey Icki is the leading spirits producer and distributor in Turkey. In the financial year ended 31st December 2010 the company had net sales of £300m and EBIT of £120m. 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.

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.

“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,” says Paul Walsh, chief executive of Diageo.