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Analysis - Fragmented market aids Stock Spirits acquisition plans

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The “fragmented” and “inefficent” nature of Central Eastern Europe's spirits market gives Stock Spirits a major opportunity for “value-enhancing” acquisitions, according to an analyst.

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The company launched an IPO in London in October and has admitted that it is eyeing acquisitions in the region. In a note today (2 December), analysts at Nomura said: “Over the medium term, we expect an opportunistic approach (by Stock Spirits) towards bolt-on acquisitions in CE Europe.

“We believe that much of the local spirits industry has been slow to professionalise, and there is an opportunity for value-creation through implementing Stock Spirit's “big-FMCG” management processes and expertise.” 

However, Nomura, which has just initiated coverage of the group, said that Stock could be a possible target itself in the medium term. “SSG could offer an interesting CE European platform for acquisition by an international spirits company,” the note said.

Nomura also noted that the group should see a strong bounce-back in Czech, which accounts for 19% of its earnings, after a temporary spirits ban in the country in September 2012.


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