M&A

16 November, 2009

UPDATE 1-CEDC to buy rest of Russian Alcohol for $510 mln

* CEDC to pay $510 million for remaining stake

* To spend $297 million on Russian Alcohol debt refinancing

* Offer to be launched on Nov. 23

(Adds detail, background)

MOSCOW, Nov 16 (Reuters) - Polish vodka maker Central European Distribution Corp (CEDC.O) is set to take 100 percent control of Russian Alcohol by the end of 2009 in an agreed deal which could pave the way for consolidation of assets in its main market.

CEDC -- which relies on Russia for over half of its revenues and almost 50 percent of its operational profits -- wants to acquire the 37.8 percent stake it does not already own for $510 million, its documents showed.

To pay for the deal, the Polish company hopes to raise around $1.2 billion via a public share offering [ID:nWNAB4888] and a placement of $870 million in senior secured notes maturing in 2016.

As well as bringing its stake in Russia's largest spirit producer to 100 percent, CEDC intends to spend $297 million on refinancing Russian Alcohol's debts.

The Russian company's second biggest shareholder is Lion Capital LLP, which has 21.87 percent.

CEDC has preliminary agreement from the other shareholders in Russia Alcohol for the deal and will launch the share purchases on Nov. 23. It aims to complete the process by Dec. 23.

The deal is yet to be approved by Russia's anti-monopoly watchdog, FAS.

Once the deal with Russian Alcohol is complete, CEDC plans to start consolidating its Russian assets into one company to improve operating profits. The assets include Parliament, maker of the vodka of the same name, and a stake in Russian importer of spirits and wines, The Whitehall Group. (Reporting by Maria Plis; Writing by Toni Vorobyova; Editing by David Cowell)

Source: http://www.reuters.com