Diageo makes £300m bid for Brazil’s Ypioca cachaca

Diageo is to expand its presence in Brazil with the acquisition of the country’s leading premium cachaca brand  Ypioca from Ypioca Agroindustrial Limitada for £300m (BRL 900m).

Brazil’s number two cachaca brand by value features a flagship straw-covered Gold expression, Ypioca Silver, plus a commemorative 160th anniversary edition.
Brazil’s number two cachaca brand by value, which achieved pro forma adjusted net sales of £60m since December 2011, is expected to be EPS neutral within year one.
With cachaca being the largest spirits category in Brazil, Diageo chief executive Paul Walsh said the acquisition would allow the drinks giant to gain a stronger foothold in the local market.
”Brazil is an attractive, fast growing market for Diageo with favourable demographics and increasing disposable incomes,,” he said. “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.
”The acquisition meets our return criteria and will be accretive to Diageo’s top line growth. This investment represents the continuation of our strategy to increase Diageo’s presence in the fastest growing economies of the world.”
The cash transaction for the brand is expected to be completed within a month.