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PEPSI-COLA INTERNATIONAL ACQUIRES CONTROLLING INTEREST IN LEADING HUNGARIAN SOFT DRINK AND MINERAL WATER BUSINESS; MOVE IS PART OF US$115 MILLION INVESTMENT IN GREATER BUDAPEST AREA OVER NEXT FIVE YEARS

 BUDAPEST, Hungary, March 9 /PRNewswire/ -- Pepsi-Cola International, the international beverage division of PepsiCo, Inc. (NYSE: PEP), today announced that it will invest more than US$115 million in the greater Budapest area over the next five years to rapidly expand and strengthen its position in Hungary.
 The five-year capital investment program includes the acquisition of 79 percent of the stock of Fovarosi Asvanyviz es Uditoipari Reszvenytarsasag (FAU), a leading Hungarian soft drink and mineral water company. Through an international tender offer by the Hungarian State Property Agency, these shares have been purchased today. The remaining shares are held by employees of FAU, the Budapest Municipality, and several other local governments. Terms of the deal were not disclosed.
 The FAU purchase is a central component of PCI's expansion plans in Hungary. It also marks the first time the company has taken an equity stake in one of its bottling and distribution operations in Eastern Europe. Pepsi beverages throughout the rest of the area are produced by independent franchised bottlers.
 "Hungary represents a focal point in Pepsi's push to accelerate its growth and overall leadership position throughout Eastern Europe," said F. David Jones, president of Pepsi-Cola International's Eastern Europe/Central Asia Division. "This investment also provides us with a great strategic opportunity to aggressively develop the entire Hungarian soft drink market, beginning with a new company-owned base in Budapest."
 Jones said the company's goal is to create in Budapest a flagship full-line beverage company. This will be achieved through an accelerated five year capital investment program that includes: new state-of-the-art manufacturing equipment; the development and introduction of new products and packaging; a rapid expansion of its sales and distribution operations; new management-systems technology and equipment; and extensive training for both local management and staff.
 The FAU operations include four manufacturing facilities: two soft drink plants located at Soroksar and Tata, and two mineral water plants located at Dobrentei Ter and Margaret Island; warehouses at Tata and Gyongyos; and various trade depots throughout Budapest.
 Also included in the transaction were the acquisition of two local mineral water brands: Harmatviz(R) ("Dew water") and Kristalyviz(R) ("Crystal water"). Kristalyviz is Hungary's leading mineral water, produced from the natural springs of Margaret Island, an historic landmark on the Danube River.
 Jones added that Hungary was a particularly attractive Eastern European investment market because of its swift move toward free-market economic development, increasingly close ties to the European Community and rapidly expanding consumer base. "Hungary is a bellwether for the tremendous growth potential of the entire Eastern Europe area," he said. "Our investment today re-affirms our long-term commitment to increase Pepsi's overall cola market leadership throughout the region."
 "Pepsi-Cola International's acquisition of FAU and planned investment underscores our view that Hungary will continue to remain one of the most attractive Central European markets for foreign investors," said Dr. Lajos Csepi, managing director of the Hungarian State Property Agency. "As Hungary enters its third year of privatization, we look at 1993 with enormous optimism and commitment to accelerating the privatization momentum achieved so far."
 Hungary ranks as the third largest soft drink market for Pepsi in Eastern Europe -- with 1992 volume topping 600 million 8-ounce servings -- and Jones said the company expects systemwide sales here to double over the next five years. Hungarians consume only 28 liters (130 8-ounce servings) of soft drinks per capita, or approximately one-third that of the Western European rate.
 Pepsi entered Hungary in 1969 with the establishment of Fovarosi Asvanyviz es Jegipari Vallalat (FAJIV), the legal predecessor to FAU, as the first franchise Pepsi bottler in the country. Pepsi soft drink brands available in the market include Pepsi(R), Pepsi Light(R) and 7UP(R).
 In an earlier move reflecting PCI's expansion efforts in Eastern Europe, PCI last month acquired the exclusive rights to bottle, distribute and market Cadbury Schweppes Plc.'s brands in Hungary, Poland, Slovakia and the Czech Republic. Under the multi-year franchise agreement, sales of Cadbury soft drinks -- including Canada Dry(R) ginger ale and Schweppes(R) tonic water -- are expected to more than double over the next five years in Hungary.
 Pepsi-Cola International markets some of the world's largest soft drink brands in over 165 countries and territories. It is one of PepsiCo., Inc.'s fastest growing divisions, with 1992 sales of US$1.5 billion, and is the volume leader in some 55 countries worldwide. Including the former Soviet Union, Pepsi is the overall market leader in Eastern Europe and outsells its nearest foreign-branded competitor by a margin of 3 to 1.
 -0- 3/9/93
 /CONTACT: Anna Nerbovig, in Budapest, 36-1-266-1000 (Until March 10, 1993 only), or in Vienna, 43-1-89-120-462, or Ken Ross in New York, 1-914-767-6894, all for Pepsi-Cola International/
 (PEP)


CO: Pepsi Cola International ST: New York IN: FOD SU: TNM

SH -- NY020 -- 4416 03/09/93 09:52 EST
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Date:Mar 9, 1993
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