PepsiCo buys majority stake in Wimm-Bill-Dann Dairy
PepsiCo and Wimm-Bill-Dann Foods OJSC of Russia say PepsiCo has agreed to acquire 66% of Wimm-Bill-Dann for $3.8 billion (EUR2.8bn), pending required government approvals. PepsiCo will also offer to acquire the remaining shares of Wimm-Bill-Dann.
Wimm-Bill-Dann is a leader in both traditional and value-added dairy products. The transaction will establish PepsiCo as the largest food-and-beverage business in Russia, make it a leader in the country’s fast-growing dairy category and build its presence in key markets in Eastern Europe and Central Asia. It also will raise PepsiCo’s annual global revenues from nutritious and functional foods from approximately $10 billion today to nearly $13 billion. This moves the company closer to its strategic goal of building a $30 billion nutrition business by 2020.
“Adding Wimm-Bill-Dann to PepsiCo’s portfolio is financially attractive and gives us a strong, high-growth platform in the dairy category,” said Indra Nooyi, PepsiCo chairman and chief executive officer. “It also gives us clear leadership in the food-and-beverage industry in Russia, a fast-growing, strategically important market offering abundant opportunity. At the same time, Wimm-Bill-Dann’s strong, value-added dairy business immediately advances our global nutrition strategy to provide consumers around the world nutritious foods and beverages that are accessible, affordable and advantaged by science. Dairy has a huge, untapped potential to bridge snacks and beverages. We see the emerging opportunity to ‘snackify’ beverages and ‘drinkify’ snacks as the next frontier in food and beverage convenience.”
The buy will bring together PepsiCo’s food and beverage brands (Pepsi-Cola, Lipton and Lay’s), its Russian juice and water brands (Fruktovi Sad, Ya, Tonus, Hrusteam and Aqua Minerale) and Wimm-Bill-Dann’s portfolio of leading dairy and juice brands (Domik v Dorevne, Chudo, Imunele, J7, Lubimy Sad, 100% Gold Premium and Agusha).
Wimm-Bill-Dann was founded in 1992 and is the largest manufacturer of dairy products and a leading producer of juices and beverages in Russia and the CIS, with revenues for the twelve months ended in June 2010 of approximately $2.4 billion. Since 2005, Wimm-Bill-Dann has nearly doubled its revenue.
The company has 38 manufacturing facilities in Russia, Ukraine and Central Asia with over 16,000 employees. In 2005, Wimm-Bill-Dann became the first and only Russian dairy producer to receive approval from the European Commission to export its products into the European Union.
In related news, The Associated Press reports that Wimm-Bill-Dann has acquired Moloko Isilkulya, a dairy producer in Western Siberia, for an undisclosed amount. Wimm-Bill-Dann says the transaction has been approved by Russian antitrust regulators. Moloko Isilkulya makes milk, sour cream, kefir and other dairy products under the Utrennyaya Zorka brand. The deal is in line with the company’s overall strategy to grow by buying companies that have strong market positions, established brands and a sustainable base of raw materials.
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