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. Last Updated: 07/27/2016

Deal Near for Moscow Turk Brewery

ISTANBUL -- Turkish beverage and automotive group Anadolu Endustri Holding said Thursday it was close to concluding a deal to build Russia's biggest brewery.

"This plant, which will be built with a $140 million project, will be Russia's biggest brewery with an annual capacity of 250 million liters," Ilker Keremoglu, vice president of Anadolu group's brewery department, said.

The brewery, to be built in Moscow, will produce Anadolu's famous Turkish brand Efes Pilsen and Russia's Knyaz (Prince) Rurik.

"We are almost at the end of year-long negotiations with the Knyaz Rurik company which is owned 80 percent by the Moscow municipality and the rest by various state firms," Keremoglu said. "We hope to sign an agreement by the end of August."

Keremoglu said Knyaz Rurik had already built a malt plant at its Moscow properties and negotiations were continuing for Anadolu's Tarbes subsidiary to acquire a 10 percent stake in the malt plant. The malt plant has an annual production capacity of 43,000 tons.

The second step will be to establish a beer company, 80 percent owned by Anadolu and international institutional investors.

"We do not want to give the names of the institutional investors and their stakes, but our stake will not be less than 51 percent," Keremoglu said.

The construction of the beer factory would normally be completed in two years, but it could take 2 1/2 years in Russia's conditions, he added.

The existing malt plant can meet only 25 percent of the needs of the planned brewery if the latter works at full capacity.

Anadolu Group is the managing partner of Coca-Cola companies in Kazakhstan, Kyrgyzstan and Russia and owns a brewery in Romania.

Morgan Stanley, Merrill Lynch and Templeton were among the international institutions that have taken part in Anadolu's domestic and overseas investments.

The group controls 70 percent of the Turkish beer market.

"We are holding talks on this acquisition which we expect will cost around $5 million. We will give know-how and take over management of the malt plant," Keremoglu said.

"We do not what the beer output will be, so we do not currently have any projections on how we will meet extra malt demand," said Keremoglu. "But the malt plant is physically suitable for possible capacity expansions."