Wimm-Bill-Dann American Depositary Receipts (ADRs) are surging by 28.5% to $31.48 in morning trading. PepsiCo shares are down 0.6% to $65.23.
The offer is about $33 per ADR share, a premium of 32% to the 30-day average trading price of Wimm-Bill-Dann's ADR shares.
In a press release, Pepsi said that its offer for the stake in Wimm-Bill-Dann represents a total enterprise value of about $5.4 billion.Pepsi plans to buy 66% of the company initially, then offer to buy the remaining shares of Wimm-Bill-Dann after the acquisition is completed. Not only will the acquisition raise Pepsi's annual global revenue from nutritious and functional foods to about $13 billion from about $10 billion, it would enable the global behemoth to become the largest food and beverage business in Russia, Pepsi said. The acquisition will be modestly accretive to earnings in the first year, minus one-time transaction costs and fees, said Pespi in a press release.
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