NEW YORK ( TheStreet) -- Wimm-Bill-Dann Foods ( WBD) stock is surging after PepsiCo ( PEP) said it was offering to buy the Russian dairy products and fruit-juice maker for $3.8 billion.
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.
-- Written by Andrea Tse in New York. >To contact the writer of this article, click here: Andrea Tse. >To follow the writer on Twitter, go to Andrea Tse. >To submit a news tip, send an email to: email@example.com.
Wimm Bill Dann Foods (NYSE:WBD) hit a new 52-week high Friday as it is currently trading at $35.18, above its previous 52-week high of $35.10 with 16,182 shares traded as of 1:52 p.m. ET. Average volume has been 216,400 shares over the past 30 days.