Diageo, the world's biggest spirits maker, today agreed to buy the Turkish spirits group Mey Icki for £1.3 billion to give it access to this fast-growing emerging market.

The drinks group is buying Turkey's biggest spirits company from investment firms TPG Capital LP and Actera. The deal is expected to be completed in the second half of 2011.

The Turkish group is the clear market leader in raki, the biggest spirits category in Turkey, and has a leading position in vodka, while it also has an extensive nationwide sales and distribution network.

It had net annual sales of £300 million in 2010 and earnings before interest and tax (EBIT) of £120 million, and will be earnings accretive for Diageo in the first full year of acquisition by around 1 per cent.

The British group said the deal will allow it to accelerate the growth of its international spirits brands in Turkey through Mey Icki's distribution network and customer relationships.

"Turkey is an attractive, growing market for Diageo with strong GDP growth. The acquisition of Mey Icki tranforms our existing position in this fast growing spirits market," said Diageo chief executive Paul Walsh in a statement.

Reuters