December 2/Moscow/RIA Novosti -- PepsiCo has signed a deal to buy Wimm-Bill-Dann, one of Russia's leading dairy producers, for $5.8 billion, Wimm-Bill-Dann's co-owner and board member David Yakobashvili said.
"We have signed an agreement, which binds us to sell shares for $132 per share, or $5.8 billion total, if PepsiCo gets approval from relevant bodies," Yakobashvili told RIA Novosti news agency.
"PepsiCo ... and Wimm-Bill-Dann Foods OJSC ...today announced that PepsiCo has agreed to acquire 66% of Wimm-Bill-Dann for $3.8 billion, pending the required government approvals," PepsiCo said in a statement.
"In connection with this acquisition, PepsiCo will offer to acquire the remaining shares of Wimm-Bill-Dann through an offer following completion of that acquisition at such time and on terms as are mandated by Russian law, and PepsiCo may acquire additional shares in other transactions."
The deal will propel PepsiCo to the position of Russia's largest food-and-beverage business and make it a leader in the country's fast-growing dairy category.
In Russia, the dairy market has grown at a compound rate of 22% to $17 billion since 2006 and is expected to grow at a low-double-digit rate for at least the next three years. Over the next five years, Russia is forecast to be one of the largest contributors to global dairy growth, PepsiCo said.
"Dairy has a huge, untapped potential to bridge snacks and beverages. We see the emerging opportunity to 'snackify' beverages and 'drinkify' snacks as the next frontier in food and beverage convenience," PepsiCo chairman and chief executive officer Indra Nooyi was quoted in the statement as saying.
Ramon Laguarta, president of PepsiCo Central and Eastern Europe Region, said in June that the company expected to become the largest food producer in Russia, where PepsiCo already owns nine plants, by 2015.
The Wimm-Bill-Dann deal will raise PepsiCo's annual global revenues from nutritious and functional foods from $10 billion now to nearly $13 billion driving the firm closer to its goal of building a $30 billion nutrition business by 2020.
From the December 20, 2010, Prepared Foods E-dition