US: CEDC pulls out of Nemiroff vodka buy
CEDC drops Nemiroff bid
Central European Distribution Corp (CEDC) has dropped plans to acquire Ukrainian vodka firm Nemiroff.
CEDC said today (7 July) that it will not seek to acquire Nemiroff and instead will focus on improving its internal finances.
Nemiroff has been searching for a buyer and CEDC initially planned to use proceeds from the sale of its Polish distribution business to bid for the Ukrainian group.
However, CEDC president and CEO William Carey said: "After thorough analysis we have determined that it is not in the company's interests to continue to pursue this transaction at this time."
Carey said that CEDC will focus on organic growth in Russia, where the group owns Russian Alcohol Group.
"We have invested over US$1.5bn over the last three years in Russia and will look to maximise the return on this deployed capital," said Carey. "We believe we have a solid leading market position to capture further growth in the region in the next three to five years and management will continue to focus on maximizing this opportunity."
He added: "We are still on track to close the sale of our Polish distribution business in the beginning of August 2010, and expect to determine the use of proceeds shortly thereafter."
The group, which also owns Zubrowka vodka and Bols, said it will consider a share buy-back or may use proceeds from the distribution sale to directly reduce debt.
CEDC recently reported a doubling of operating profits on the back of strong sales in the first quarter of 2010.
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