Diageo in Talks to Buy PE-Backed Mey Icki

Beverage company Diageco is in early talks to buy Turkish spirits company Mey Icki, Reuters reported. The value of the deal could reach as high as $2.5 billion, Reuters said. Mey Icki is owned by private equity firm TPG Capital, which had been exploring an initial public offering for the company. An acquisition could provide an alternative to the IPO. The private equity firm bought Mey Icki for about $800 million in 2006, Reuters said.

(Reuters) – Diageo Plc, the world’s biggest drinks company, has expressed interest in Turkish spirits company Mey Icki, a person familiar with the matter said, offering owner TPG an alternative to an initial public offering.

Diageo is in preliminary talks to buy Mey Icki for up to $2.5 billion, the person said, in what could be the first step in a dual-track process, considering both a sale or a market listing.

The Wall Street Journal earlier reported that Diageo is in early stage discussions for Turkey’s leading spirits producer.

“The talks are early stage, and it is unclear whether they will lead to anything,” the person told Reuters.

TPG Capital, the owner of Mey Icki, has been exploring an IPO of stock in the company.

It has mandated JPMorgan Goldman Sachs , Credit Suisse and Bank of America Merrill Lynch to run the IPO, a source close to the deal previously told Reuters.

The private equity firm bought Mey Icki, the dominant producer of Turkey’s national drink, raki, for about $800 million in 2006.

Diageo, maker of Johnnie Walker Whisky, Tanqueray gin and Smirnoff vodka, could not be immediately reached for comment. TPG declined to comment.

By Victoria Howley
(Additional reporting by Jessica Hall and Megan Davies in New York and Simon Meads in London; Editing by Will Waterman)