"This acquisition will help PepsiCo gain a solid beachhead for expansion into Sub-Saharan Africa by boosting the company's manufacturing and go-to-market capabilities, enabling scale and distribution", the company said in a statement.
A wholly-owned subsidiary of U.S. multinational food, snack and beverage corporation PepsiCo has given notice of its firm intention to make an offer to acquire the issued ordinary shares of South African packaged goods company Pioneer Foods, the two said on Friday.
PepsiCo, which is listed on the Nasdaq in the USA, has announced on Friday that it has entered into an agreement to acquire all outstanding shares of Pioneer Food Group for R110 per share, a 56.5% premium as of July 12.
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.
The transaction is, however, subject to relevant regulatory approvals and a Pioneer Foods shareholder vote.
Food and beverages giant PepsiCo plans to buy Pioneer Foods for $1.7-billion (R16.7-billion). Acquiring Pioneer Foods would increase PepsiCo's presence in a country and region of high growth potential.
"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, CEO of Pioneer Foods. PepsiCo is keenly aware of the importance of economic transformation through Broad-Based Black Economic Empowerment ("BEE") and intends to support Pioneer Foods' BEE program.
He added that while investors should not necessarily "rush out and buy a whole lot of South African labels", deals like the PepsiCo and Pioneer transaction "make flawless sense". Bowmans acted as the South African legal counsel to PepsiCo.
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.
PepsiCo left South Africa under Apartheid and then returned in 1994, only to file for voluntarily liquidation in 1997 after a fierce battle with its global rival Coca-Cola saw it lose significant market share. "We are looking to expand our footprint", PepsiCo executive Eugene Willemsen, who will head up the operation from Cape Town, told Bloomberg News.
Cisse draws Senegal closer to history
Senegal livened up their structure two minutes later, as Ismaila Sarr replaced Krepin Diatta on the wide side. Cisse, Senegal's captain at the time, missed a vital penalty for Senegal during the shoot-outs.