PepsiCo will buy out General Mills' share of their Snack Ventures Europe joint venture for $750 million.
General Mills' sale of its 40.5% share gives PepsiCo sole ownership of the business, whose sales exceed $1 billion annually, and ends the 12-year-old joint venture.
The deal is expected to close in early 2005.
Minneapolis-based General Mills will use the cash to pay down its debts. The cereal giant joined forces with Purchase, N.Y.-based PepsiCo to leverage their strengths in separate markets. Snack Ventures Europe pooled General Mills' savory snacks and sweet biscuit business in France, Belgium and the Netherlands with PepsiCo's salty and sweet snacks business in Spain, Portugal and Greece.
The purchase gives PepsiCo a stronger foothold in Europe, where it has bought regional snack brands (including Romanian firm Star Foods, in November via the joint venture) and worked hard to distribute and market snacks and beverages together as part of its "Power of One" strategy.