PepsiCo to buy Pioneer Foods to support its African expansion plans
FIN24 / 19 JULY 2019 - 09.48 / FIN24 TEAM
PepsiCo, which owns food brands Frito-Lay and Pepsi-Cola, will be acquiring local food group Pioneer Foods which produces Weet-Bix, Liqui-Fruit and White Star maize, among other products.
The companies on Friday issued a joint statement indicating PepsiCo will acquire all outstanding shares of Pioneer Foods at R110 per share.
The acquisition is approximately $1.7bn (R23.6bn), it will be funded through a combination of debt and cash and has been approved by the boards of both companies, the statement indicated. It is subject to Pioneer Foods' shareholder approval and regulatory approval.
The acquisition will help PepsiCo's plans to expands into the rest of Africa. "Pioneer Foods represents a differentiated opportunity for PepsiCo and allows us to immediately scale our business in Africa. Pioneer Foods forms an important part of our strategy to not only expand in South Africa, but further into sub-Saharan Africa as well," said PepsiCo chairman, Ramon Laguarta.
"Our businesses are highly complementary, and we look forward to working with the Pioneer Foods team to successfully build and implement a shared vision in the region," he added.
PepsiCo assured that it is aware of the importance of economic transformation through Broad-Based Black Economic Empowerment and will support Pioneer Foods' existing BEE programme.
"As part of PepsiCo, we will have greater scale to expand our leading brands, greater capital to invest in local agriculture and people, greater access to leading global capabilities and a partner committed to taking our company to even greater heights," Pioneer Foods CEO Tertius Carstens said.
PepsiCo sub-Saharan Africa will be led by Eugene Willemsen, formerly PepsiCo's Executive Vice President of Global Categories & Franchise Management.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER