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.