Diageo has ended its interest in acquiring Stock Spirits

Diageo has ended its interest in acquiring Stock Spirits

Diageo is no longer seeking to acquire Stock Spirits, just-drinks understands.

Diageo has ended its interest in acquiring Stock Spirits, owner of Czysta de Luxe vodka, sources close to the situation have told just-drinks today (26 April). It is believed that valuation was the major barrier to a deal between the Johnnie Walker distiller and Stock's private equity owner, Oaktree Capital Management.

Oaktree Capital has, for several months, been considering either a sale or a stock market flotation for Stock Spirits, which claims to be the number one spirits group by volume in both Poland and Czech, as well as the number one vodka firm in Italy.

Diageo's interest came as part of the drinks giant's decision to pursue takeovers more vigorously in emerging markets. So far this year, it has already agreed to buy Turkey's leading spirits producer, Mey Içki, for US$2.1bn and a 24% stake in Hanoi Liquor Joint Stock Co for GBP33m (US$54.5m).

Stock Spirits would have provided Diageo with a strong distribution platform across key parts of Eastern Europe. However, Diageo has repeatedly said that, despite its interest in acquisitions, it will not overpay for assets.

It is thought that Oaktree is looking for at least GBP500m for Stock Spirits. If no buyers can be found, then the private equity group is considering an initial public offering, just-drinks understands.

Neither Diageo nor Stock Spirits would comment on the situation.

To read just-drinks' analysis of this development, click here.