Pepsi says Russia approves mega takeover

27th January 2011, Comments 0 comments

PepsiCo said Thursday that it had won Russia's full approval for its acquisition of a local dairy and juices maker that will make the US giant into the country's largest food and drinks firm.

The world's second-largest food and beverage company said that its purchase of Wimm-Bill-Dann had been approved by Russia's Federal Anti-Monopoly Service as well as the government's commission in charge of foreign investments.

"This means that PepsiCo has received all the necessary state agency permits necessary for completing the deal," PepsiCo said in a Russian-language statement.

The acquisition is PepsiCo's largest investment outside the United States and one of the biggest in Russia outside its vast energy sector.

PepsiCo was the first US consumer goods company to break into the Soviet market in 1973 and will now become Russia's largest snacks and drinks maker, gaining a major advantage over its eternal rival Coca-Cola.

The deal was immediately hailed by Russian officials as a sign that foreign investors were looking for new opportunities in the country outside its raw materials base.

"I think its one of the greatest deals for the country and it shows that the investment climate is changing," First Deputy Prime Minister Igor Shuvalov said on the sidelines of the World Economic Forum meeting in Davos.

"We work hard to achieve what is called a new Russia," he said.

Russia has sought to attract new foreign investments as it tries to recover from a 2009 financial meltdown that derailed a modernisation drive intended to wean the country off its dependence on energy revenues.

PepsiCo on December 2 said that it had agreed to pay 5.4 billion dollars (4.1 billion euros) for Russia's largest dairy and baby food producer.

The takeover would enable PepsiCo to become not only the country's largest food and beverage business but also expand further into eastern Europe and the former Soviet states.

The announced agreement envisions PepsiCo taking immediate control of a 66-percent stake in Wimm-Bill-Dann for 3.8 billion dollars.

© 2011 AFP

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