Central European Distribution Corporation is to acquire a 61% stake in Polmos Bialystok for PLN 1.06 billion (US$312m).

CEDC said late yesterday that it had signed a share purchase agreement with the Polish Treasury Ministry for the acquisition of Poland's second largest producer of vodka.

The share purchase will be completed upon receipt of approvals from the Polish anti- monopoly office and the Polish securities and stock exchange commission. The acquisition is expected to close in the third quarter of 2005.

In a statement CEDC said: "We are currently arranging financing for the purchase price of the Polmos Bialystok shares. As provided for in the share purchase agreement, we deposited today PLN 100m. This deposit will be credited towards the total purchase price or will be returned to us if the transaction has not closed during the next six months for reasons which are not attributable to us. In addition, in the share purchase agreement we agree that Polmos Bialystok will make certain investments consistent with its on-going business needs, including the construction of a spirits rectification unit."

William Carey, chairman and CEO of CEDC, said: "We are very pleased that after two years of working towards the finalization of the privatisation of Polmos Bialystok, we have reached this important milestone with the Polish Treasury. We have also submitted the application last week to the Polish anti-monopoly office for approval, a process that takes approximately 60 days. We still look to close this transaction during the 3rd quarter of this year, subject to anti-monopoly office approval.

"With the closing of this acquisition, CEDC will control the number one vodka brand in Poland, Absolwent, as well as owning the Zubrowka trademark, one of the top 10 best selling domestic vodka brands and one of the fastest growing export brands. We look forward to working with existing Polmos Bialystok senior management to continue to expand the development of Polmos Bialystok's product portfolio domestically as well as internationally."