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Eternal Pepsi-Coke Struggle Moves to Russian Juice Front |
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Friday, 21 March 2008 |
The Pepsi system on Thursday expanded its global rivalry with Coca-Cola, buying a majority stake in Russia's largest juice maker.
PepsiCo Inc. and Pepsi Bottling Group, PepsiCo's largest bottler, said they plan to jointly buy a 75.5 percent stake in Moscow-based Lebedyansky for $1.4 billion. It would be PepsiCo's largest acquisition since buying Quaker Oats, Gatorade's parent, in 2001 for about $14 billion.
The deal, subject to regulatory approval, does not include the Russian firm's baby food and mineral water businesses.
"This agreement provides us with a strong platform for continued expansion in one of the world's fastest-growing juice markets and advances the global transformation of PepsiCo's product portfolio," said Michael White, vice chairman of PepsiCo and chief executive of PepsiCo International.
The Pepsi deal would set up a head-to-head battle between Pepsi and Coca-Cola in yet another market and beverage segment.
In 2005, Atlanta-based Coca-Cola and Coca-Cola Hellenic Bottling Co., its Greek bottling partner, bought Multon, Russia's second-largest juice company. Multon has the best-selling brand in Russia, Dobry.
Coca-Cola has built a broader international business than PepsiCo. In 2007, about 70 percent of Coca-Cola's revenue came from operations outside of North America, compared with 40 percent for PepsiCo.
Lebedyansky helps PepsiCo expand in a key emerging market, said John Sicher, editor and publisher of Beverage Digest. "It's consistent with their strategy to focus resources and attention on the international beverage business," Sicher said. "It gives them a very significant brand in a very important international market."
Copyright 2008 The Atlanta Journal-Constitution |
