Printer Friendly

PEPSICO AGREES TO ACQUIRE SPAIN'S KAS AND KESA BEVERAGE GROUPS FOR U.S. $320 MILLION

 MADRID, Nov. 23 ~PRNewswire~ -- In a single stroke, PepsiCo, Inc. (NYSE: PEP) today moved to significantly strengthen its position in the Spanish marketplace by agreeing to acquire Kas S.A., the owner of several of the country's most popular beverage brands, and Knorr Elorza S.A. (KESA), a bottling joint venture that manufactures and distributes both Pepsi and Kas products.
 PepsiCo will acquire 100 percent ownership of the two operations from Banco Bilbao Vizcaya, Spain's largest financial institution, which holds majority positions in both Kas and KESA. The purchase price is approximately U.S. $320 million. The deal is subject to approval by the European Commission.
 The KESA joint venture was formed in 1989 to produce and sell PepsiCo's global soft drink brands, including Pepsi-Cola, Pepsi Light and Seven-Up, and Kas's local, market-leading line of fruit-flavored drinks and mixers. Previously, Pepsi held a 30 percent stake in the bottling operation and the Knorr family, the founders of Kas, had 19 percent. Banco Bilbao Vizcaya held the balance of KESA, and a majority of Kas.
 Net revenue for the combined beverage operations is an estimated $470 million this year and Pepsi said it expected the business to top $1 billion in sales within five years. KESA is currently the fastest- growing beverage company in Spain, with sales this year expected to increase six percent. That is a particularly strong showing given the marginal growth in the local soft drink market this year and the challenging economic environment overall in Spain.
 The acquisition is a central component of the corporations's major expansion plans for Spain. Last November, PepsiCo announced it will invest more than $1 billion over five years in its Spanish operations, which also include Productos PepsiCo, the country's leading snack food concern, and restaurant chains Pepsi Hut Espana and Kentucky Fried Chicken Espasa.
 In announcing the beverage acquisition at a Madrid news conference today, Christopher A. Sinclair, president and chief executive officer of Pepsi-Cola International, the corporation's international soft drink division, said: "Our beverage business in Spain has gained very solid operating momentum over the last several years and we continue to view the market as one of our most significant growth opportunities. The acquisition speaks strongly to our long-term commitment here and provides a major thrust for our growth plans in Europe."
 Javier Echenique, president and chief executive officer of La Corporacion de Alimentacion, Banco Bilbao's food and beverage unit, added: "We believe that PepsiCo's acquisition of the Kas and KESA groups is the best possible guarantee of their continued success. These operations already form one of the most admired beverage companies in Spain, and we think Pepsi's expertise and commitment will take Kas and KESA to new heights."
 The KESA beverage venture was established as part of Pepsi's strategic plan to consolidate its Spanish bottling operations. Pepsi's business had previously been divided among six separate franchises, but the company sought to create a single, nationwide bottling system with increased operating efficiency and more effective marketing. Today, KESA's territory covers nearly all of Spain, with the exception of Cataluna, whose Pepsi-Cola business remains franchised to Cadbury Schweppes.
 "Creating a national bottler with strength and scale, while uniting such complementary brands as Pepsi's and Kas's, allowed us to compete very effectively in Spain," said John Derkach, president of Pepsi-Cola de Espana. "Acquiring the operation will give us added strength and will further invigorate our efforts to become a truly premier beverage company in the region."
 Since KESA was formed four years ago, aggressive investments have already been made in the business, including the construction of state- of-the-art manufacturing facilities at its southern hub in Seville and at its northern center in Echevarri, Vitoria. The facilities, which are among the most modern and efficient in Europe, each incorporate in-plan manufacturing of plastic (PET) bottles and corresponding filling lines. The Seville plant includes two high-speed glass bottle lines and the Vitoria facility has an additional can line.
 Pepsi-Cola has operated in Spain since 1955 and the country today represents its 15th largest soft drink market. In all, Spain is parent company PepsiCo's sixth largest market outside the United States, following Mexico, the United Kingdom, Canada, Japan and Australia.
 PepsiCo is among the largest and most successful consumer products companies in the world, with projected 1992 revenues of more than $20 billion and over 360,000 employees. It is a world leader in soft drinks, the world's largest producer of salty snacks and it operates the largest restaurant system in the world.
 -0- 11~23~92
 ~CONTACT: Kenneth Ross of Pepsi-Cola International, 914-767-6894, or Richard Detwiler of PepsiCo, Inc., 914 253 2725~
 (PEP)


CO: PepsiCo, Inc. ST: New York IN: FOD SU: TNM

PS -- NY023 -- 0369 11~23~92 10:10 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 23, 1992
Words:789
Previous Article:THE DRESS BARN, INC., REPORTS EARNINGS UP 40 PERCENT FOR FIRST QUARTER
Next Article:LEGG MASON NAMES 'THANKSGIVING LIST' OF STOCK SELECTIONS
Topics:


Related Articles
PEPSICO ANNOUNCES PLANS TO INVEST $1 BILLION IN SPAIN DURING NEXT 5 YEARS
PEPSICO REPORTS THIRD QUARTER RESULTS
PEPSICO ANNOUNCES RECORD RESULTS
PEPSICO ANNOUNCES RECORD RESULTS
PEPSI-COLA AND GEMEX FORM MAJOR BOTTLING JOINT VENTURE IN MEXICO CITY AND OTHER KEY MEXICAN MARKETS
Pepsi-Cola Puerto Rico Bottling Company Announces Special Meeting of Shareholders.
PepsiCo to Acquire The Quaker Oats Company.
PepsiCo not just into Pepsi Bottling interest, shares fell.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters