PepsiCo

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will make and sell products such as potato chips and vegetable snacks in Japan under an alliance with the country's largest snack company.

Under the agreement, Pepsi will contribute its Frito-Lay Japan business plus an undisclosed amount of cash to Calbee Foods, while Calbee will issue new stock to Pepsi. The U.S. food and beverage giant will own 20% of the expanded company and have a seat on Calbee's board.

The combined businesses currently generate annual revenue of about $1.4 billion, Pepsi said in a statement Wednesday.

The alliance is subject to approval from Japanese authorities.