By Benjamin Chiou
Date: Thursday 02 Dec 2010
LONDON (ShareCast) - US drinks giant PepsiCo is set to buy a majority stake in Russian food and beverage company Wimm-Bill-Dann Foods (WBD) for over $5bn.
PepsiCo announced Thursday that it has agreed to acquire 66% of WBD for $3.8bn, and the remaining shares once the acquisition is completed, implying a total value of around $5.4bn.
The Russian group is the country's leading branded food-and-beverage company in "both traditional and value-added dairy products, with a solid position in juice", PepsiCo said in a statement.
"The transaction will establish PepsiCo as the largest food-and-beverage business in Russia, make it a leader in the country's fast-growing dairy category and build its presence in key markets in Eastern Europe and Central Asia".
PepsiCo expects the acquisition to add around $3bn to its annual global revenues from nutritious and functional foods. "This moves the company closer to its strategic goal of building a $30bn nutrition business by 2020", the group says.
The price offered is equivalent to $132 per ordinary share of WBD, representing a premium of 32% to the average trading price over the last 30 days, PepsiCo said.
"Adding Wimm-Bill-Dann to PepsiCo's portfolio is financially attractive and gives us a strong, high-growth platform in the dairy category," said Indra Nooyi, PepsiCo chairman and chief executive officer.
"It also gives us clear leadership in the food-and-beverage industry in Russia, a fast-growing, strategically important market offering abundant opportunity", Noovi added.
Upon completion, PepsiCo will have six of the top 20 largest food and beverage brands in Russia, and three of the top 20 overall brands.
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