Diageo has reached agreement with Ypióca Agroindustrial Limitada to acquire the premium cachaça brand, Ypióca, and certain production assets.
The consideration is BRL900m (approximately £300m) in cash and the transaction is expected to complete in a month. It expands Diageo’s presence in Brazil and enhances access to the growing number of middle class consumers who are driving the growth of premium brands.
The acquired Ypióca brand has net sales of BRL177m (approximately £60m) based on the pro forma adjusted figures as of December 2011. Ypióca has an extensive sales and distribution network in the Northeast of Brazil.
Paul Walsh, CEO of Diageo, said: "Brazil is an attractive, fast growing market for Diageo with favourable demographics and increasing disposable incomes.
"The acquisition of Ypióca gives us the leading premium brand in the largest local spirits category. It will also provide Diageo with an enhanced platform from which to accelerate the long term growth of our premium international spirits brands in Brazil.
"This investment represents the continuation of our strategy to increase Diageo’s presence in the fastest growing economies of the world.”
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