PepsiCo's Russia deal gets initial nod of approval
PepsiCo's biggest acquisition outside the United States made progress on Monday when the head of Russia's anti-monopoly service said the unit looked favourably on the US company's takeover of a major local firm.
PepsiCo on December 2 agreed to pay 5.4 billion dollars (4.1 billion euros) for Wimm-Bill-Dann, Russia's largest dairy and baby food producer and number three juice maker.
The takeover would be one of the biggest outside the Russian energy sector and enable PepsiCo to become not only the country's largest food-and-beverage business but also to expand further into eastern Europe and the former Soviet states.
Russia's Federal Anti-Monopoly Service (FAS) still needs to approve the acquisition, but its chief told reporters Monday that he supported the deal.
"We are well disposed toward this transaction," Interfax quoted FAS head Igor Artermyev as saying. "We see absolutely no problems there."
It was not clear when a formal ruling on the deal would be issued and PepsiCo officials were not immediately available for comment on the report.
The December 2 agreement envisions PepsiCo taking immediate control of a 66-percent stake in Wimm-Bill-Dann for 3.8 billion dollars.
The remaining shares are to be bought progressively in an acquisition that PepsiCo hopes will enable it to establish a 30-billion-dollar nutrition business by 2020.
Wimm-Bill-Dann was founded in 1992 and has managed to double its revenues since 2005 on the back of 20-percent annual accrued growth of the Russian dairy market.
© 2010 AFP