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Pepsi Co, Pepsi Bottling Buy Russian Juice Firm

Mar 21, 2008, 5:00 AM
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On the heels of having purchased Russian bottler Sobol-Aqua JSC earlier this week, the two Pepsi entities have agreed to jointly acquire a 75.53% stake in Russia's leading branded juice company JSC Lebedyansky, excluding the company's baby food and mineral water business, for $1.4 billion.

Lebedyansky is the world's sixth-largest juice manufacturer and the largest in Russia, with an estimated market share in Russia of around 30% and annual revenues in 2007 of approximately $800 million from its juice business.

Under agreements reached, PepsiCo and PBG will acquire the 75.53% of Lebedyansky held by its four largest individual shareholders. That purchase will be split 75%/25% by PepsiCo and PBG, respectively.

As required by Russian law, and subject to the successful completion of the spin-off, PepsiCo and PBG will make a mandatory offer to purchase the shares held by all remaining shareholders in Lebedyansky shortly after the transaction closes. Upon completion of the mandatory offer, the two companies' stake in Lebedyansky may become as high as 100%.

--Nina M. Lentini

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