Central European Distribution Corporation Signs Binding Heads of Terms to Buyout Remaining Stake in the Whitehall Group and Purchases Global Brand Rights for Kauffman Vodka

MT. LAUREL, N.J., Nov. 29, 2010 /PRNewswire-FirstCall/ -- Central European Distribution Corporation (Nasdaq: CEDC) today announced that it has signed a binding Heads of Terms for the buyout of the remaining stake in the Whitehall Group which is an acceleration of its current 2013 call option. In addition, the investment will include the purchase of the Global Brand Rights for Kauffman Vodka.

The Whitehall Group is one of the leading importers and distributors of premium wines and spirits in Russia in which CEDC currently has an 80% economic stake.  Kauffman vodka is one the leading super-premium vodkas in Russia with a strong presence in top end restaurants and hotels and key accounts.  The brand is also exported to high-end customers in over 25 countries.  

The final purchase price of $91.5 million includes all the remaining economic and voting shares not currently held by CEDC, as well as the global brand rights for the Kauffman vodka brand.  Of the total purchase price, approximately $26 million constitutes the value of the Kauffman vodka brand, according to CEDC's estimates, with the remaining  $65.5 million representing the value of the remaining economic and voting shares of Whitehall that are being acquired.

The proposed purchase of the controlling shares of the Whitehall Group is subject to anti-trust approval.  The investment is expected to close within the next 6 weeks and will be financed through a combination of approximately $68.5 million in cash and $23.0 million in shares of CEDC.

William Carey, President and CEO, commented: "We are pleased to report that this investment will provide us with 100% ownership and management control over all investments in Russia that we started in 2008.  By taking full ownership and management control of the Whitehall group, we will be able to consolidate the last of the three Russian businesses into our financial results, giving a clearer picture of our financial performance.  We expect the impact of this investment in the Whitehall Group to be accretive to our 2011 results."

William Carey, President and CEO, continued:  "We believe the growth of the wine and brown spirit market will continue to flourish in Russia with an improving consumer who we believe will continue to buy into these categories, much as we have seen in Poland over the last ten years.  The Whitehall Group is one of the leading import companies in Russia today, and we believe has a strong portfolio to accelerate our growth in these fast-developing categories."

Mr. Carey continued:  "In addition to the accelerated call option, we will be purchasing the Kauffman Vodka brand and all related domestic and international IP rights which will fill a void in our current portfolio in Russia with the second leading super-premium vodka brand in Russia.  The sales potential in the domestic and export markets is very attractive, and we believe we can accelerate growth in both of these sectors."

CEDC is the largest producer of vodka in the world and Central and Eastern Europe's largest integrated spirit beverage business.  CEDC produces the Green Mark, Absolwent, Zubrowka, Bols, Parliament, Zhuravli, Royal and Soplica brands, among others. CEDC currently exports its products to many markets around the world, including the United States, England, France and Japan.

CEDC also is the leading national distributor of alcoholic beverages in Poland by value, and a leading importer of alcoholic beverages in Poland, Russia and Hungary. In Poland, CEDC imports many of the world's leading brands, including brands such as Carlo Rossi Wines, Concha y Toro wines, Metaxa Liqueur, Remy Martin Cognac, Guinness, Sutter Home wines, Grant's Whisky, Jagermeister, E&J Gallo, Jim Beam Bourbon, Sierra Tequila, Teacher's Whisky, Campari, Cinzano, Skyy Vodka and Old Smuggler. CEDC is also a leading importer of premium spirits and wines in Russia..

This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, the expected results of, and synergies relating to, our Russian businesses and the completion of our acquisition of the Whitehall Group. Forward looking statements are based on our knowledge of facts as of the date hereof and involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of CEDC to be materially different from any future results, performance or achievements expressed or implied by our forward looking statements.

Investors are cautioned that forward looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. CEDC undertakes no obligation to publicly update or revise any forward looking statements or to make any other forward looking statements, whether as a result of new information, future events or otherwise, unless required to do so by securities laws. Investors are referred to the full discussion of risks and uncertainties included in CEDC's Form 10-K for the fiscal year ended December 31, 2009, including statements made under the captions "Item 1A. Risks Relating to Our Business" and in other documents filed by CEDC with the Securities and Exchange Commission.

SOURCE Central European Distribution Corporation