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.<\/p>\n
PepsiCo owns brands such as Pepsi, Lays and Doritos, while Pioneer owns local favourites like Liqui-Fruit, Sasko and Bokomo.<\/p>\n
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).<\/p>\n
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.<\/p>\n
The group intends to use South Africa as a hub for expansion throughout Africa.<\/p>\n
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.<\/p>\n
“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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
The deal will now go through various approval processes, with the aim that it will be completed by June 2020.<\/p>\n