CMA clears $1.7bn acquisition of Pioneer Food Group by Pepsico

The Competition and Markets Authority (CMA) of the UK has cleared the proposed acquisition of Pioneer Food Group by PepsiCo.

In July 2019, PepsiCo signed an agreement to acquire all outstanding shares of Pioneer Food Group producer for $1.7bn.

Based in South Africa, Pioneer Food sells cereals, snacks and juices under various brands, including Weet-Bix, Liqui-Fruit and Ceres.

In January, CMA opened an investigation into the acquisition by Pepsico.

This clearance was the final requirement for the acquisition.

PepsiCo said that the deal will allow them to “gain a solid beachhead for expansion into Sub-Saharan Africa by boosting the company’s manufacturing and go-to-market capabilities.”

The boards of the two companies have unanimously approved the deal.

PepsiCo said that it intends to fund the acquisition through a combination of debt and cash.

This acquisition forms part of PepsiCo’s strategy to strengthen presence in sub-Saharan Africa. As part of the deal, it will also create a new operating sector for Sub-Saharan Africa (SSA).

Earlier this month, South Africa’s Competition Commission approved PepsiCo’s acquisition of Pioneer Foods through its South African subsidiary Simba.

PepsiCo chairman and CEO Ramon Laguarta said: “We are absolutely thrilled to join forces with Pioneer Foods, one of South Africa’s leading food and beverage companies.

“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.”