PepsiCo Gains Ground in Russia (PEP, WBD, JMBA, MTL, NILSY, OGZPY)
U.S. beverage giant PepsiCo (PEP) is continuing its foray into Russia’s food and beverage market with its announced acquisition of Russian dairy products and fruit-juice maker Wimm Bill Dann Foods (WBD) in a deal valued at $5.8 billion.
The deal is PepsiCo’s largest acquisition outside the U.S ever according to the Wall Street Journal, enabling the company to become the biggest food-and-beverage business in Russia and a leader in Russia’s growing dairy market.
Shares of PepsiCo were down about 1% Thursday. Overall, the Beverage Stocks Index is up fractionally for the day, with Jamba (JMBA) posting the biggest gain.
Investors have reacted positive to the deal, sending Wimm-Bill-Dann’s stock up about 30%. As a whole, Russia Stocks and ADRs were trading in positive territory, up about 5% on Thursday. Russian mining company Mechel OAO (MTL), which was up more than 7%, the world’s top nickel and palladium miner MMC Norilsk Nickel (NILSY), up 4%, and Gazprom OAO (OGZPY), up by more than 3%, are the other top gainers for the day.
Under the deal, PepsiCo will initially acquire 66% of Wimm-Bill-Dann for as much as $3.8 billion, and subsequently look to take over the whole company for $5.4 billion in total enterprise value. The deal, however, will require approval from the Russian government, which has been receptive to the acquisition.
Investors can track the Russia Stocks and ADRs Index for performance trends and a suite of other metrics at tickerspy.com.
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