US food giant PepsiCo moves to acquire Sasko and Bokomo owner Pioneer Foods

US multinational food, snack, and beverage corporation PepsiCo has put in an offer to acquire all the outstanding shares of South African packaged goods company Pioneer Foods at a R110 per share premium.

PepsiCo owns brands such as Pepsi, Lays and Doritos, while Pioneer owns local favourites like Liqui-Fruit, Sasko and Bokomo.

In a post published to the JSE’s SENS, Pioneer laid out the ‘firm intention’ from PepsiCo to acquire the stake, which is valued at approximately $1.7 billion (R23.5 billion).

The transaction reflects one of PepsiCo’s largest acquisitions outside of the United States, which it said demonstrates its belief in South Africa’s potential and its long-term commitment to the country.

The group intends to use South Africa as a hub for expansion throughout Africa.

As rationale for the acquisition, PepsiCo said that it believes Africa is a key market for future growth, and a meaningful portion of its existing portfolio is in developing and emerging markets where further expansion is a high priority.

“Africa is an important component in PepsiCo’s expansion strategy due to its attractive macro-economic prospects and the relative affordability and value positioning of many of PepsiCo’s products,” it said.

It also said that its existing portfolio can provide many benefits to both the South African and broader African consumer. Acquiring Pioneer Foods will increase PepsiCo’s presence in a country and region of high growth potential.

For Pioneer, the group will, in turn, have access to PepsiCo’s brand portfolio for Africa, including Simba, Doritos, Nik-Naks, as well as PepsiCo’s bottling network, boosting local presence and go-to-market capability.

The group said that shareholders who collectively hold 52.85% of the aggregate of the issued ordinary and Class A shares, have furnished “irrevocable undertakings” to vote in favour of or accept the PepsiCo Offer.

The deal will now go through various approval processes, with the aim that it will be completed by June 2020.

Read: South Africa’s 10 strongest and most valuable brands

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US food giant PepsiCo moves to acquire Sasko and Bokomo owner Pioneer Foods