PURCHASE (dpa-AFX) - Snack and beverage giant PepsiCo Inc. (PEP) announced Friday that it has entered into an agreement to acquire Africa-based Pioneer Foods Group Ltd. for about $1.7 billion in total.
The acquisition will be funded through a combination of debt and cash, and has been unanimously approved by the Boards of Directors of both companies.
The transaction is subject to Pioneer Foods shareholder vote, certain regulatory approvals, and other customary conditions.
The deal closure is expected by first quarter of calendar year 2020.
The deal price represents a 56% premium to the 30-day volume weighted average price prior to the cautionary announcement on July 15.
PepsiCo expects the acquisition to help it gain a solid beachhead for expansion into Sub-Saharan Africa by boosting the company's manufacturing and go-to-market capabilities.
As part of this transaction, PepsiCo will create a new operating sector for Sub-Saharan Africa or SSA. PepsiCo SSA will be led by Eugene Willemsen, who most recently served as Executive Vice President of Global Categories & Franchise Management.
PepsiCo SSA will remain part of Europe Sub-Saharan Africa or ESSA.
Copyright RTT News/dpa-AFX