Pepsi spends millions on Russian juice maker
NEW YORK (AP) - March 20, 2008 That price tag that makes it PepsiCo's biggest acquisition since
it bought The Quaker Oats Co. in 2001, spokesman Dick Detwiler
said.
PepsiCo, the second-biggest U.S. soft drink company and maker of
Frito-Lay snacks, and bottler Pepsi Bottling Group Inc. will buy a
75.5 percent stake in Lebedyansky that is now held by the company's
four biggest individual stockholders. Once the deal closes, the two
companies will offer to buy the remaining shares, as required by
Russian law. They could end up owning all the shares.
PepsiCo Chief Executive Indra Nooyi has said the company has a
"robust" acquisition pipeline that it will use to expand its
product portfolio to include more healthier snacks and drinks. It
sells brands such as Doritos, Cheetos, Lay's, Mountain Dew,
Gatorade and Tropicana. Other recent acquisitions include the
Ukraine-based juice maker Sandora, New Zealand-based Bluebird
snacks and Izze and Naked Juice in the U.S.
PepsiCo has a decades-old relationship with Russia that dates to
when Soviet Premier Nikita Khrushchev tried Pepsi for the first
time in 1959, according to a company statement. In 1974, the
company opened a Pepsi-Cola bottling plant in Russia, making it the
first Western-branded consumer product to be produced in the
country. Today, PepsiCo and PBG together employ more than 7,000
workers in Russia.
JSC Lebedyansky had 2007 annual revenue of about $800 million
from its juice operations. PepsiCo's purchase price gives the
entire juice business a value of roughly $2 billion.
The deal is subject to the spin-off of Lebedyansky's baby food
and mineral water business to its shareholders as well as
regulatory approvals. It is not expected to close before the third
quarter.
On Monday, Purchase-based PepsiCo and Pepsi Bottling said they
bought Russian beverage company Sobol-Aqua JSC through a joint
venture. Terms were not disclosed.
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AP Business Writer Michelle Chapman in New York contributed to
this story.
