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Pepsi-Cola owner PepsiCo acquires control of SA’s giant consumer group, Pioneer Foods

Pepsi-Cola owner PepsiCo acquires control of SA’s giant consumer group, Pioneer Foods

Control of Pioneer Foods, the South African consumer giant that puts popular brands like Weet-Bix, Liqui-Fruit, Ceres, Safari Dried Fruit, and many others on Namibian shelves, is set to be acquired by PepsiCo, the owner of Pepsi Cola.

Nasdaq-listed PepsiCo announced last week it has entered into an agreement to acquire all the outstanding shares of the JSE-listed Pioneer Foods Group Ltd, for R110.00 per share in cash. This constitutes a purchase consideration of some US$1.7 billion or almost R24 billion. In 2018, Pioneer Foods generated revenues of more than R20 billion.

PepsiCo has been in the consumer retail business since its then Chief Executive, John Sculley expanded the product range in the 1970s to hundreds of brands other than the well-known soft drink. The company has now set its sights on Africa as part of its world-wide expansion strategy.

“Today’s announcement marks a very exciting milestone for Pioneer Foods and our people, and highlights the strength of what we have created,” said Tertius Carstens, the Pioneer Foods Chief Executive. “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.”

“This acquisition will help PepsiCo gain a solid beachhead for expansion into Sub-Sahara Africa by boosting the company’s manufacturing and go-to-market capabilities, enabling scale and distribution. Finally, this transaction brings together two like-minded companies, with both Pioneer Foods and PepsiCo aligned around a vision for building a more sustainable future and investing in communities. With Pioneer Foods, PepsiCo adds an extraordinary team of associates who will be instrumental to growth across the continent.” stated PepsiCo.

“We are absolutely thrilled to join forces with Pioneer Foods, one of South Africa’s leading food and beverage companies,” said PepsiCo Chairman, Ramon Laguarta. “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, not only to expand in South Africa, but further into sub-Saharan Africa as well. 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.”

As part of this transaction and PepsiCo’s goal to become more locally focused, the company will create a new operating sector for Sub-Sahara Africa. PepsiCo SSA will be led by Eugene Willemsen, who most recently served as Executive Vice President of Global Categories & Franchise Management. Willemsen, who has been with PepsiCo for nearly 25 years, has extensive experience in growth markets, having previously led the company’s businesses in Turkey and South East Europe. This new structure will not impact PepsiCo’s reporting structure, and PepsiCo SSA will remain part of Europe Sub-Sahara Africa from a financial reporting perspective.

In the USA, UBS Investment Bank, J.P. Morgan and Centerview acted as financial advisors to PepsiCo. Bowmans acted as the South African legal counsel to PepsiCo. PSG Capital acted as corporate and transaction advisor to Pioneer Foods and Webber Wentzel acted as South African legal counsel to Pioneer Foods. (PR Newswire)

Caption: Tertius Carstens (left), Chief Executive of Pioneer Foods and Eugene Willemsen, Chief Executive of PepsiCo Sub-Sahara Africa.


About The Author

SADC Correspondent

SADC correspondents are independent contributors whose work covers regional issues of southern Africa outside the immediate Namibian ambit. Ed.