Pepsi acquires Pioneer Foods

Pepsi acquires Pioneer Foods

"As we look to accelerate our growth in key markets around the world and achieve our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with objective, we are absolutely thrilled to join forces with Pioneer Foods, one of South Africa's leading food and beverage companies", said PepsiCo Chairman and CEO, Ramon Laguarta.

"Pioneer Foods represents a differentiated opportunity for PepsiCo and allows us to immediately scale our business in Africa", PepsiCo CEO and chairperson Ramon Laguarte commented.

JSE-listed Pioneer Foods' share price rose by almost 31% on Friday after the company announced the conclusion of an agreement with New York-headquartered PepsiCo, which plans to acquire all of the outstanding shares in Pioneer at R110 a share.

The companies said PepsiCo had made a firm intention to offer a cash price of R110 per share to current Pioneer shareholders, a premium of 56% of the share price measured over the the last month.

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 transaction is subject to a Pioneer Foods shareholder vote, certain regulatory approvals, and other customary conditions, and closing is expected by Q1 calendar year 2020.

Global food giant PepsiCo and South African Pioneer Foods have announced plans for a deal worth around R24 billion - the biggest ever for the United States company outside its home country. Acquiring Pioneer Foods would increase PepsiCo's presence in a country and region of high growth potential.

It's great to see some investment interest in South African shares.

It said PepsiCo's existing portfolio, with its broad nutritional offerings, could provide many benefits to both the South African and broader African consumer. PepsiCo SSA will be led by Eugene Willemsen, who most recently served as Executive Vice President of Global Categories & Franchise Management.

Zeder's share price on the JSE had risen by 23% by 14:40 on Friday.

The acquisition gives PepsiCo several brands and manufacturing facilities in countries including Nigeria and Kenya as well as South Africa.

The deal builds on PepsiCo's US$3.2 billion (RM13.1 billion) buyout of Israel's SodaStream previous year.

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