Diageo swoops for Brazilian spirits maker

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Diageo is pushing ever deeper into the BRIC markets with the acquisition of premium Brazilian cachaca brand Ypioca.

The drinks giant has struck a cash deal with Ypioca Agroindustrial Limitada to acquire the brand and certain production assets for about £300m.

The deal, which is expected to complete in a month will expand Diageo’s footprint in Brazil as it looks to tap into a growing middle class consumer base in the country.

Cachaca is the largest spirits category in Brazil and Ypioca leads the premium segment with net sales totalling about £60m at the end of December 2011.

The acquisition follows Diageo’s swoop on leading spirits group Sichuan Chengdu Quanxing in China which completed earlier this year. 

Diageo CEO Paul Walsh said the latest deal would help the company accelerate the long term growth of its premium international spirits brands in Brazil and be “accretive” to top line growth. 

“Brazil is an attractive, fast growing market for Diageo with favourable demographics and increasing disposable incomes,” he said. “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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