RUSSIA/US: Central European Distribution Corporation to buy rest of Whitehall Group

By | 30 November 2010

The full purchase of Whitehall will see CEDC bring all its Russian businesses together

The full purchase of Whitehall will see CEDC bring all its Russian businesses together

Central European Distribution Corporation has lined up the purchase of the remaining shares in Russian spirit firm the Whitehall Group.

The US-based spirits company, which acquired a 49.9% voting interest and a 75% economic interest in Whitehall for US$200m in 2008, confirmed yesterday (29 November) that it will take full control of Whitehall for $91.5m. The acquisition includes the global brand rights for Whitehall's super-premium Kauffman vodka brand, valued by CEDC at around $26m.

The transaction, which is expected to close - subject to anti-trust approval - within the next six weeks, will be financed through a combination of around $68.5m in cash and $23m in shares of CEDC. The move brings forward CEDC's option, agreed in 2008, to buy Whitehall outright at the end of 2013.

"By taking full ownership and management control of the Whitehall group, we will be able to consolidate the last of the three Russian businesses into our financial results, giving a clearer picture of our financial performance," said CEDC's president and CEO, William Carey.

"We expect the impact of this investment in the Whitehall Group to be accretive to our 2011 results."

Earlier this year, CEDC pulled out of talks to acquire Ukrainian vodka firm Nemiroff, saying that it subsequently intended to focus on organic growth in Russia.

Sectors: Mergers & acquisitions, Spirits

Companies: CEDC

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