PURCHASE, New York and
JOHANNESBURG, July 19, 2019 /PRNewswire/ -- PepsiCo, Inc.
(NASDAQ: PEP) ("PepsiCo") today announced that it has entered into
an agreement to acquire all the outstanding shares of Pioneer Foods
Group Ltd. (JSE: PFG) ("Pioneer Foods") for R110.00 per share in
cash (approximately US $1.7 billion),
which represents a 56% premium to the 30-day volume weighted
average price prior to the cautionary announcement on July 15, 2019.
Pioneer Foods has a robust, locally relevant product portfolio
that complements PepsiCo's current lineup, with strong positions in
cereals, juices, and other African nutritional food staples,
including well-known, scaled brands like Weet-Bix, Liqui-Fruit,
Ceres, Sasko, Safari, Spekko, and White Star. At the same time,
this acquisition will help PepsiCo gain a solid beachhead for
expansion into Sub-Saharan Africa by boosting the company's
manufacturing and go-to-market capabilities, enabling scale and
distribution. Finally, this transaction brings together two
likeminded companies, with both Pioneer Foods and PepsiCo aligned
around a vision for building a more sustainable future and
investing in communities. With Pioneer Foods, PepsiCo adds an
extraordinary team of associates who will be instrumental to growth
across the continent.
"As we look to accelerate our growth in key markets around the
world and achieve our vision to Be the Global Leader in
Convenient Foods and Beverages by Winning with Purpose, we are
absolutely thrilled to join forces with Pioneer Foods, one of
South Africa's leading food and
beverage companies," said PepsiCo Chairman and CEO, Ramon Laguarta. "Pioneer Foods represents a
differentiated opportunity for PepsiCo and allows us to immediately
scale our business in Africa.
Pioneer Foods forms an important part of our strategy to not only
expand in South Africa, but
further into sub-Saharan Africa as well. Our businesses are highly
complementary, and we look forward to working with the Pioneer
Foods team to successfully build and implement a shared vision in
the region."
This transaction creates a leading food and beverage company in
Africa led from South Africa, with a commitment to supporting
the broad socioeconomic imperatives of employment, talent
development, and benefiting local suppliers. It will enable PepsiCo
to expand its Sustainable Farming Program in Africa and work with local farmers in Pioneer
Foods' communities—including women and rural smallholders—to help
boost yields, improve livelihoods, and preserve precious natural
resources. PepsiCo is keenly aware of the importance of economic
transformation through Broad-Based Black Economic Empowerment
("BEE") and intends to support Pioneer Foods' BEE program.
"Today's announcement marks a very exciting milestone for
Pioneer Foods and our people, and highlights the strength of what
we have created," said Tertius
Carstens, CEO of Pioneer Foods. "As part of PepsiCo, we will
have greater scale to expand our leading brands, greater capital to
invest in local agriculture and people, greater access to leading
global capabilities and a partner committed to taking our company
to even greater heights."
As part of this transaction and PepsiCo's goal to become faster
and more locally focused, the company will create a new operating
sector for Sub-Saharan Africa ("SSA"). PepsiCo SSA will be led by
Eugene Willemsen, who most recently
served as Executive Vice President of Global Categories &
Franchise Management. Willemsen, who has been with PepsiCo for
nearly 25 years, has extensive experience in growth markets, having
previously led the company's businesses in Turkey and South East Europe. This new
structure will not impact PepsiCo's reporting structure, and
PepsiCo SSA will remain part of Europe Sub-Saharan Africa ("ESSA")
from a financial reporting perspective.
The acquisition, valued at approximately US $1.7 billion, which implies approximately 11x
FY2020E consensus EBITDA, will be funded through a combination of
debt and cash, and has been unanimously approved by the Boards of
Directors of both companies. The transaction is subject to a
Pioneer Foods shareholder vote, certain regulatory approvals, and
other customary conditions, and closing is expected by Q1
calendar year 2020.
UBS Investment Bank, J.P. Morgan and Centerview acted as
financial advisors to PepsiCo. Bowmans acted as the South African
legal counsel to PepsiCo. PSG Capital acted as corporate and
transaction advisor to Pioneer Foods and Webber Wentzel acted as South African legal
counsel to Pioneer Foods.
About PepsiCo
PepsiCo products are enjoyed by consumers more than one billion
times a day in more than 200 countries and territories around the
world. PepsiCo generated more than $64
billion in net revenue in 2018, driven by a complementary
food and beverage portfolio that includes Frito-Lay, Gatorade,
Pepsi-Cola, Quaker and Tropicana. PepsiCo's product portfolio
includes a wide range of enjoyable foods and beverages, including
22 brands that generate more than $1
billion each in estimated annual retail sales.
Guiding PepsiCo is our vision to Be the Global Leader in
Convenient Foods and Beverages by Winning with Purpose. "Winning
with Purpose" reflects our ambition to win sustainably in the
marketplace and embed purpose into all aspects of the
business. For more information, visit www.pepsico.com
About Pioneer Foods
Pioneer Foods is one of the largest South African producers and
distributors of a range of branded food and beverage products and
posted revenue of R20.2 billion in 2018. For shoppers around the
world, Pioneer Foods is the food and beverage company that develops
and delivers products that help them and their families realise
their full potential and live better lives through the company's
quest and purpose to consistently establish new and enhanced ways
of producing, distributing, marketing and selling products.
The Group operates mainly across South
Africa and exports to more than 80 countries across the
globe inclusive of a number of countries in Africa. Through its established joint
ventures initiatives the Group also operates in Namibia, Botswana, Kenya and Nigeria. In South Africa the Group operates a number of
world-class production facilities producing a range of products
that includes some of the most recognizable and best loved brand
names in South Africa, including
the following brands: Weet-Bix, Liqui-Fruit, Ceres, Sasko, Safari,
Spekko and White Star.
Forward Looking Statements
Statements in this communication that are "forward-looking
statements" are based on currently available information, operating
plans and projections about future events and trends. Terminology
such as "estimate," "expect," "may," "plan," "position," "will" or
similar statements or variations of such words and other similar
expressions are intended to identify forward-looking statements,
although not all forward looking statements contain such terms.
Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially
from those predicted in such forward looking statements. Such risks
and uncertainties include, but are not limited to: changes in
demand for PepsiCo's products, as a result of changes in consumer
preferences or otherwise; changes in laws related to the use or
disposal of plastics or other packaging of PepsiCo's products;
changes in, or failure to comply with, applicable laws and
regulations; imposition or proposed imposition of new or increased
taxes aimed at PepsiCo's products; imposition of labeling or
warning requirements on PepsiCo's products; PepsiCo's ability to
compete effectively; political conditions, civil unrest or other
developments and risks in the markets where PepsiCo's products are
made, manufactured, distributed or sold; PepsiCo's ability to grow
its business in developing and emerging markets; uncertain or
unfavorable economic conditions in the countries in which PepsiCo
operates; failure to successfully complete, integrate or manage
acquisitions and joint ventures into PepsiCo's existing operations
or to complete or manage divestitures or refranchisings; changes in
estimates and underlying assumptions regarding future performance
that could result in an impairment charge; increase in income tax
rates, changes in income tax laws, including as a result of
enactment and implementation of the Switzerland Federal Act on Tax
Reform and AHV Financing, or disagreements with tax authorities;
PepsiCo's ability to recruit, hire or retain key employees or a
highly skilled and diverse workforce; loss of, or a significant
reduction in sales to, any key customer; disruption to the retail
landscape, including rapid growth in hard discounters and the
e-commerce channel; climate change or water scarcity, or legal,
regulatory or market measures to address climate change or water
scarcity; other factors that may adversely affect the price of
PepsiCo's publicly traded securities and financial performance; and
risks related to the proposed acquisition, including the inability
to satisfy the conditions to the closing of the proposed
acquisition and risks that the proposed acquisition disrupts
current plans and operations of Pioneer Foods and the potential
difficulties in employee retention as a result of the proposed
transaction.
For additional information on these and other factors that could
cause PepsiCo's actual results to materially differ from those set
forth herein, please see PepsiCo's filings with the Securities and
Exchange Commission, including its most recent annual report on
Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors
are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they
are made. PepsiCo undertakes no obligation to update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Contacts:
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Investors
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Media
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Jamie
Caulfield
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Carrie
Ratner
|
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Investor
Relations
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Corporate
Communications
|
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914-253-3035
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914-253-3817
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investor@pepsico.com
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carrie.ratner@pepsico.com
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