23 Jul PepsiCo ties up $1.8 billion deal for South Africa’s Pioneer Foods
PepsiCo will acquire South Africa’s Pioneer Foods in a deal worth around R24.4 billion (US$1.8 billion), as the US drinks giant prepares to expand across sub-Saharan Africa in the coming years.
The deal was announced after PepsiCo offered R110 a share for Pioneer, a premium of about 56% on its last closing price. Pioneer’s largest shareholder, Zeder Investments, will vote in favour of the deal alongside investors holding over half the FMCG group’s stock.
It gives PepsiCo several brands and manufacturing facilities in countries from Nigeria, Kenya and South Africa, establishing a hub in the latter which will provide a base for its expansion across the continent.
“This transaction is all about growth. We are looking to expand our footprint,” said Eugene Willemsen, who is moving to Cape Town from PepsiCo’s New York headquarters to oversee the region.
The deal is the first major international purchase made by PepsiCo under new chief executive officer Ramon Laguarta, who took the helm in October. The last major acquisition by the company was the US$3.2 billion buyout of Israel’s SodaStream International last August.