Diageo's agreement to buy Turkish spirits maker Mey Içki should not only give it Turkey's market leader in popular drink Raki, but also access to a fast-growing market.
That was the interpretation being put on the deal this morning. The markets largely shrugged off its impact on the world's biggest spirit maker. By mid-morning, Diageo was up 3p, just 0.25%, to £12.03. The FTSE 100 as a whole was down by 0.38%.
The deal is worth £1.3bn, which values Mey Içki Sanayi ve Ticaret, to give it its full name, at around 10 times EBITDA in 2010.
Diageo is buying the company from private equity group TPG Capital and Actera.
Mey Içki is a leading seller of local vodka as well as Raki, but Diageo will also hope to push its brands through the Turkish company's network.
"Turkey is seeing rapid growth of its middle classes, so there is growth in local raki and vodka, while the deal provides a fantastic platform for Diageo's international brands in Turkey," Andrew Morgan, head of Diageo's European business, said today.
The deal has been held up by tax issues which will shortly be resolved, Diageo has indicated.
