Pepsi Outbids Coke in Fight for Ukrainian Juice Maker

PepsiCo and PepsiAmericas says it has won the bidding war with Coca-Cola for Ukrainian juice-maker Sandora. Pepsi will buy 80% of the company for $542 million plus debt. The deal is expected to close in the third quarter. It provides PepsiAmericas and PepsiCo with a strong platform for growth in the Ukrainian beverage market, "one of the fastest growing beverage markets in Europe," it said. It also bolsters Pepsi's international portfolio, as it seeks to overcome weak U.S. soda sales; more than half of Pepsi's Q1 profit growth was from sales of drinks and snacks outside North America. "Sandora's market-leading brands will be a wonderful addition to our portfolio," it said PepsiAmericas expects the acquisition to be $0.02-0.03 dilutive in 2007, and $0.01 accretive to 2008 EPS. It said the purchase will have no impact on PepsiCo's EPS guidance for 2007. PepsiCo shares are up 9.4% over the past year; PepsiAmericas is up 4.6% in the same period.

Sources: Press release, Wall Street Journal
Commentary: Jones Soda: The Long Case, and a Threat to Coke and Pepsi • Super Fizzy Soda Stocks • Pepsi Shares are Overbought - A Sell Sign
Stocks/ETFs to watch: Pepsico Inc. (PEP), PepsiAmericas Inc. (PAS), Coca-Cola Company (KO)

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