CEDC and Lion Capital Ink Russian Alcohol Deal

A binding agreement has been announced between Lion Capital LLP and Central European Distribution Corporation (CEDC) that increases CEDC’s ownership in Russian Vodka producer Russian Alcohol Group. The complicated agreement calls for CEDC to eventually acquire sole management control over Russian Alcohol Group over a five year period. CEDC currently is a minority owner but will be immediately granted enhanced minority rights. When CEDC’s payments to Lion and other investors reaches USD 230 million, they will jointly govern Russian Alcohol in a 50/50 joint deal with Lion. Upon reaching USD 380 million in payments, the company will gain sole majority control. CEDC retains the right to make its payments earlier than planned thereby gaining control sooner. The deal still faces certain government approvals.

Russian Alcohol Group (www.rusalco.com)
Russian Alcohol Group was founded in 2003 and is made up of four vodka manufacturing facilities in the Russian cities of Pushinko, Tula, Tbilisi, and Koltsova. The group also maintains an additional factory in St. Petersburg producing cocktail beverages. Employing more than 4,000 people, Russian Alcohol Group is Russia’s largest vodka producer by volume.

Central European Distribution Corporation (www.cedc.com.pl)
CEDC is a Polish distributor of alcohol and spirits established in 1990, made of 25 companies covering production, distribution, retail, importing, and exporting of alcohol products in Central and Eastern Europe. The group distributes nearly 700 famous brands like Bols Vodka, Grant’s, Metaxa, Rémy Martin, and Guinness, from 16 distribution centers and 76 outlets throughout Poland.

Lion Capital LLC (www.lioncapital.com)
UK based Lion Capital was founded in 2004 as a private equity firm concentrating on large consumer oriented businesses. Since its inception, Lion has invested over €4 billion in companies representing €17 billion of enterprise value.

Lion currently has two active funds, Lion Capital Fund I and Lion Capital Fund II which have a combined value in excess of €2.8 billion.