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Issue Date: Vol. 51, No. 9, September 2011, Posted On: 9/12/2011

PepsiCo Concludes Wimm-Bill Dann Buy

by Staff Reporter
PepsiCo, Wimm-Bill-Dann Foods OJSC, Coca Cola Co.

PURCHASE, NY -- In what is widely regarded as the biggest foreign acquisition of a Russian company, PepsiCo Inc. recently announced the completion of the acquisition of Wimm-Bill-Dann Foods OJSC, Russia's leading branded food and beverage company.

PepsiCo acquired 601,948 ordinary shares, representing approximately 1.37% of WBD's outstanding shares, in a squeeze-out process.  As a result, PepsiCo now owns 100% of the outstanding ordinary shares of WBD, which includes all ordinary shares underlying American Depositary Shares.

Wimm-Bill-Dann produces dairy products, juices, mineral water and baby food.

In December last year, PepsiCo had made a bid of $5.4 billion for Wimm-Bill-Dann Foods to acquire the dairy and fruit juice company. In the first stage the retail giant acquired 66% of Wimm-Bill-Dann’s stock from the company’s main shareholders and treasury stock for $3.8 billion. The acquisition increased PepsiCo's total ownership of Wimm-Bill-Dann's ordinary shares to approximately 77%.

In July 2011, Pepsi had announced that it would buy the remaining 23% of Wimm-Bill-Dann Foods and delivered a "squeeze-out" demand notice to Wimm-Bill-Dann Foods, stating that all registered holders of ordinary shares as of Aug. 15, 2011, will be entitled to receive 3,883.70 Russian rubles per share, similar to the price that was offered to WBD shareholders in PepsiCo's recently completed tender offer in Russia.

Beverage giants Pepsi and Coca Cola Co. are both eager on expanding their businesses in the Russian market, whose economy is estimated to grow by 3.8% in 2011. However, both companies forecast Russia’s dairy market to expand at a low-double-digit rate for at least the next three years.

Purchase, NY-based PepsiCo entered the Russian market in 1974 and has invested $3 billion into the market in the past decade. Just before this deal, Pepsi took over 75.53% of Lebedyansky, Russia's leading juice producer, for $1.4 billion.

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