PepsiCo Inc. Has Agreed To Buy South Africa’s Pioneer Foods Group Ltd. For $1.7 Billion

…Snack-and-beverage giant plans to use the purchase of South Africa’s Pioneer Foods to expand across the region… Pioneer Foods is one of South Africa’s largest producers and distributors of branded food and beverage products, and PepsiCo said it planned to use that market presence as a beachhead for expansion across the continent.

PepsiCo joins a slew of companies from retailers to hotel chains to beer makers that are expanding in Africa. The continent offers businesses the world’s fastest-growing population, a number of swiftly expanding economies and a growing middle class.

“We believe that the African continent represents a tremendous growth opportunity,” Eugene Willemsen, PepsiCo’s newly appointed chief executive for sub-Saharan Africa, said in an interview, citing the continent’s population and expanding economies.

Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.

PepsiCo said it would pay 110 South African rand ($7.93) for each Pioneer share, a nearly 42% premium to Thursday’s closing price. The stock traded up 32% on Friday.

The deal is PepsiCo’s second-largest acquisition outside the U.S. since 2010. Last year, the company bought Israel-based SodaStream International Ltd. for $3.2 billion.

Pioneer, which has 22 food and beverage brands, mainly operates in South Africa but exports to more than 80 countries. It reported revenue of about $1.46 billion last year. PepsiCo doesn’t break out its sub-Saharan results; its unit that includes the region plus Europe reported $11.5 billion in revenue for 2018.


PepsiCo said Pioneer’s products—especially cereals, juices and other African food staples—would be a good fit with its existing offerings in the region. Pioneer’s brands include juices such as Liqui-Fruit and Ceres, as well as Weet-Bix cereal and White Star maize meal flour.

“The portfolios are highly complementary in nature,” Mr. Willemsen said, adding that the focus will be on building up the company’s food business across Africa.


PepsiCo also sees an opportunity to boost its manufacturing and marketing capabilities. Mr. Willemsen said the company would take advantage of the synergies between Pioneer Foods and PepsiCo’s wholly owned South African snack-food manufacturer, Simba (Pty) Ltd.

Pioneer’s beverage brands are quite well known in sub-Saharan Africa, said John Thompson, an analyst at Investec Asset Management in Cape Town, South Africa. That will give PepsiCo a leg up in tapping the growth expected in many African countries, he said. “If you’ve got that 15- or 20-year view, I don’t think you can go too far wrong.”

With the acquisition, PepsiCo said it would expand its sustainable farming program in Africa and work with local farmers to help boost yields, improve livelihoods, and preserve natural resources.

Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.

The deal has been unanimously approved by the boards of both companies, but is subject to approval from Pioneer’s shareholders and regulators. The deal is expected to close by the first quarter of 2020.

Categories: Business

Tags: , , , , , , , ,

4 replies


  1. U.S. Stocks Tumbled After A Sharp Escalation In U.S.-China Trade Tensions – Stock Market News Today
  2. Berkshire Hathaway Posts Rising Profit – Stock Market News Today
  3. Pre-Market Data: U.S. Futures Point To Dow Opening More Than 260 Points Lower – Stock Market News Today
  4. US Removes Some Items From China Tariff List – Stock Market News Today

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: