Comment - Diageo Takes Stock, Leaves Stock
We should not be too surprised that Diageo has ended its flirtation with Stock Spirits.
Diageo is pursuing acquisitions with renewed vigour these days and so, it seems, the drinks giant is eyeing-up anything that strays across its path.
This is particularly true in emerging markets, as group CEO Paul Walsh explained to journalists at the beginning of 2011: "Bolt-on deals in the developing world are very important to us," he said at the company's half-year results conference.
The group has shown this by agreeing to purchase Turkey's leading spirits producer, Mey Içki, for US$2.1bn, as well as a 24% stake in Hanoi Liquor Joint Stock Co for GBP33m (US$54.5m). It is also seeking indirect control of Chinese baiju spirit maker Shui Jing Fang.
In this context, Diageo's interest in Stock Spirits makes sense. As with the above, the premise for a deal has less to do with brands and a lot to do with distribution muscle in important markets. Stock Spirits is the leading spirits player by volume in Poland and Czech, while it also leads Italy's vodka market.
However, the Stock Spirits deal has always had the feel of a nice-to-have rather than a need-to-have: not like Mey Içki, which Diageo pursued almost to the point of stretching its famed fiscal boundaries. In the end, Oaktree Capital Management's asking price for Stock has proved unattractive, given the potential gains.
However, I doubt that this will be Diageo's last skirmish on the mergers and acquisitions field before 2011 is out.
Having raised a few eyebrows with its pursuit of Foster's Group, SABMiller has won back a few cheerleaders by signing a strategic alliance with Anadolu Efes. Chris Mercer looks at the market reaction ...
A new report incorporating the IWSR's spirits rankings and a just-drinks readership survey confirms Johnnie Walker's status as the undisputed global brand leader in the spirits sector but also has som...
The UK Wine & Spirit Trade Association has nominated Diageo's Nick Hyde as its next chairman....
- Focus - Pernod's YTD Performance by Region
- Comment - Will We Understand the Language of Rum?
- Is Diageo on the Brink of a Brain Drain?
- Focus - Heineken's Q1 Performance by Region
- just On Call - Pernod shifts Scotch focus in China
- CFO of Diageo's United Spirits stands down
- Pernod Ricard sees YTD recover as sales increase
- Remy Cointreau US head to step down
- Pernod Ricard unveils Havana Club ad campaign
- BrewDog launches GBP25m crowd-funding attempt
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Bacardi Limited - Strategy and SWOT Report
- ALDI 2015: Radically transforming Anglo Saxon grocery markets