Big, soon bigger in Russia

PepsiCo Inc. will be Russia”™s largest food and beverage business with its pending $3.8-billion purchase of a two-thirds share of Wimm-Bill-Dann Foods, a leading Russian marketer of dairy and juice products.

Purchase-based PepsiCo will pay $33 per share, a 32-percent premium to the 30-day average trading price of WBD”™s American-market shares. PepsiCo also agreed to extend WBD shareholders an offer for full ownership after this deal is completed.

PepsiCo officials said the purchase will raise the company”™s annual global revenue from nutritious and functional foods from approximately $10 billion to nearly $13 billion, moving the company closer to its strategic goal of $30 billion in nutrition business by 2020.

PepsiCo Chairman and CEO Indra Nooyi said the WBD acquisition provides a high-growth platform for traditional and value-added dairy products and makes PepsiCo the clear leader in Russia”™s fast-growing and strategically important food-and-beverage market. The Russian company also builds PepsiCo”™s presence in key markets in Eastern Europe and Central Asia.

PepsiCo will be about twice the size of its nearest food and beverage competitor in Russia. It will employ about 31,000 people at 49 manufacturing facilities in Russia, Ukraine and Central Asia.

Sergei Plastinin, chairman of the Wimm-Bill-Dann board of directors and one of the Russian owners selling shares to PepsiCo, called the agreement historic for both his 18-year-old, 16,000-employee company and for Russia. The merger “represents a tremendous vote of confidence in the future of the Russian market,” he said, and gives WBD employees access to “a world-class corporate culture and almost unlimited career potential” at PepsiCo.