DIAGEO, THE producer of Guinness, has made its first billion-pound acquisition in a decade with the £1.3 billion purchase of Mey Içki, Turkey’s leading spirits company.

The deal takes the UK-based premium drinks group further into the emerging markets on which it is relying for growth as its western European sales flag.

Chief executive Paul Walsh said that with 74 million people and a rapidly expanding middle class, Turkey was an attractive prospect and Mey Içki a “great platform”.

In addition to extensive distribution and marketing networks, which Diageo hopes to leverage for its portfolio, the Turkish company – owned by private equity groups TPG and Actera – commands 80 per cent of the domestic market for raki, the national drink.

It is a leader in Turkey’s expanding vodka market.

It reported sales of TL766 million (€352 million) last year.

“They’ve sealed Turkey now,” Jamie Isenwater, an analyst with Deutsche Bank, said. “It’s now going to be only ever peripheral for anyone else for the next 10 or 15 years.”

He said the deal, which values the group at 9.9 times 2010 earnings before interest, tax, depreciation and amortisation, looked sound but cited regulation as a potential bugbear.

Turkey banned some advertising last month and analysts had mixed predictions about growth potential in the spirits market.

Diageo’s shares were flat yesterday at £12.01.

Mr Walsh said the Mey Içki purchase – which will be paid for out of existing cash resources and debt – would not dent the prospect of further acquisitions. – (Copyright The Financial Times Limited 2011)