PepsiCo (PEP - Get Report) has agreed to purchase South Africa's Pioneer Foods Group for $1.8 billion, or 24.4 billion rand. The deal allows PepsiCo to acquire all of the outstanding shares of Pioneer for 110.00 rand in cash per share. According to a press release, that price represents a 56% premium to the 30-day volume weighted average price "prior to the cautionary announcement on July 15, 2019."
The acquisition is PepsiCo's first major purchase since it bought carbonated drink maker SodaStream for $3.2 billion in late 2018. The Pioneer Foods Group makes local brands such as Weet-Bix breakfast cereal and Ceres fruit juice.
"This transaction is all about growth. We are looking to expand our footprint," Eugene Willemsen, executive vice president, Global Categories and Franchise Management, told Bloomberg Friday.
Willemsen, plans to move from PepsiCo's New York headquarters to Cape Town to oversee operations there. Expanding even further into sub-Saharan Africa is a near-term possibility for Pepsi, some speculate.
PepsiCo shares were down 0.9% to $131.68 following the announcement on Friday.