logo

PepsiCo returns to Africa through $1.7bn Pioneer Foods bid

PUBLISHED: Fri, 19 Jul 2019 10:06:49 GMT

Share

By Kopano Gumbi, CNBC Africa reporter

American beverage company PepsiCo has entered into an agreement to buy South African food company Pioneer Foods. Pepsi has offered R110 per share, which represents a 56 percent premium on the stock.

The transaction is one of PepsiCo’s largest outside of the United States. The soft drink maker says it plans to use South Africa as a base for its African expansion.

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.

Pioneer Foods and Pepsi have had a long standing relationship. In 2006, Pioneer signed a franchise agreement with Pepsi and slowly started to re-introduce their soft drinks back into the South African Market.


Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.

RELATED