Lebedyansky Executive Director Magomet Tavkazakov
Photo: Sergey Mikheev
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PepsiCo to Lead on Russia’s Juice Market
PepsiCo officially confirmed yesterday the purchase of 75.53 percent in Lebedyansky for $1.357 billion and the intention to widen the stake to no less than 95 percent for the purpose of delisting. The acquisition will make PepsiCo the leader of Russia’s juice market, covering 30.6 percent of it. But Coca-Cola is in no yielding mood. The sources say it negotiates the purchase of Wimm-Bill-Dann juice business to win back the leadership. Coca-Cola’s Multon has the market share of 21.1 percent.
The negotiations of Lebedyansky and PepsiCo were reported far back in summer of 2007. On March 5, Lebedyansky surged 5.2 percent from $82.7 to $87 on RTS and MICEX on rumors that the deal would be announced soon. Yesterday, the manufacturers confirmed the validity of insider information that leaked to the traders.
PepsiCo and Pepsi Bottling Group are buying 75.53 percent in Lebedyansky for $1.357 billion, i.e. $88.02 per a stock, the parties announced at the joint press conference Thursday. The stocks are being bought from State Duma member Nikolay Bortsov (30 percent), his son Yuri Bortsov (25.1 percent), who chairs Lebedyansky BOD, as well as from BOD members Olga Belyavtseva (18.4 percent) and Dmitry Fadeev (2 percent) and from the management (0.3 percent). The stocks will be shared by PepsiCo and Pepsi Bottling Group at the ratio of 75 to 25.
Four biggest holders of Lebedyansky - the Bortsovs, Belyavtseva and Fadeev – will retain the baby-food and mineral water production, as PepsiCo isn’t interested in those businesses. Indeed, Lebedyansky generated roughly $800 million from the juice sales past year, while the baby-food division yielded $123.8 million and mineral water accounted for just $18 million.
PepsiCo needs no public company in Russia. Once the deal is completed, it will endeavor to delist Lebedyansky, said Michael White, the president of PepsiCo International and deputy BOD at PepsiCo. But everything will depend on minority holders, as they need to own 95 percent in Lebedyansky for delisting, the official specified.
www.kommersant.com
All the Article in Russian as of Mar. 21, 2008
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