PepsiCo to Acquire Pioneer Foods for US$1.7bn

Daniel Fowler
July 20, 2019

US -based beverage and snack maker PepsiCo PEP.O is planning to acquire South Africa's Pioneer Food Group PFGJ.J for around $1.7 billion, the two companies said on Friday, as it targets expansion in Africa.

The companies on Friday issued a joint statement indicating PepsiCo will acquire all outstanding shares of Pioneer Foods at R110 per share.

"No one knows how long this downturn was going to last, or how long it would take the share price to go back to 110 rand, which is what PepsiCo is offering", said Peter Takaendesa, a money manager at Cape Town-based Mergence Investment Managers.

"Pioneer Foods forms an important part of our strategy to not only expand in South Africa but further into sub-Saharan Africa as well", PepsiCo Chairman and CEO Ramon Laguarta said in a statement.

Known for brands such as Weet-Bix, Liqui-Fruit, and White Star, Pioneer distributes products in more than 80 countries in Africa and other parts of the world.

The two companies announced the acquisition agreement on Friday.

Video shows man climbing down a high-rise to escape a fire
And so a man grasped the side of a 19-story high-rise that had caught fire in Philadelphia on Thursday and started descending. Philadelphia Fire Assistant Chief Harry Bannan told ABC that, "We did make some forcible entry on some units".

It will enable PepsiCo to expand its Sustainable Farming Program in Africa and work with local farmers in Pioneer Foods' communities-including women and rural smallholders-to help boost yields, improve livelihoods, and preserve precious natural resources. "We are looking to expand our footprint", said PepsiCo executive Eugene Willemsen, who will manage the USA soft drink and food manufacturer's presence in Africa.

PepsiCo also confirmed that it meant to support Pioneer Foods' black economic empowerment programme. Bowmans acted as the South African legal counsel to PepsiCo.

It said PepsiCo's existing portfolio, with its broad nutritional offerings, could provide many benefits to both the South African and broader African consumer.

The fact that PepsiCo are paying such a premium sends the message that they are quite keen to get this deal done.

The company has been impacted by the cyclical downturn in the overall economy that has affected the share price, but the market structure has not changed significantly.

This transaction creates a leading food and beverage company in Africa led from South Africa, with a commitment to supporting the broad socioeconomic imperatives of employment, talent development, and benefiting local suppliers.

Other reports by

Discuss This Article