Central European Distribution Corp., Bala Cynwyd, announced today that it has signed a binding commitment for a strategic investment in the Russian Alcohol Group, the leading vodka producer in Russia.

CEDC's planned equity investment of $156.5 million in Russian Alcohol will provide the company with an initial stake of about 40 percent in the Russian Alcohol business, the company said in a news release.

The company distributes approximately 700 brands of alcoholic beverages consisting of various alcoholic products, including spirits, wine, and beer, as well as non-alcoholic beverages.

This transaction is in connection with London-based investment firm Lion Capital LLP's acquisition of a controlling stake in Russian Alcohol.

In addition to the equity investment, CEDC will purchase $103.5 million of exchangeable notes, which bear interest from 8.3 percent to 10.5 percent and can be fully exchanged into additional shares of Russian Alcohol starting in 2010.

Russian Alcohol is the largest vodka producer in Russia with over a 10% market share, according to CEDC.

CEDC shares were trading at $68.40 late morning, up $2 from yesterday's close.