MINNEAPOLIS & PURCHASE, N.Y.--(BUSINESS WIRE)--PepsiAmericas, Inc. (NYSE:PAS) and PepsiCo (NYSE:PEP) today announced that they have completed the joint purchase of 80 percent of Sandora, LLC (?Sandora?), the leading juice company in Ukraine. The joint venture expects to acquire the remaining 20 percent interest in Sandora in November 2007.
?We?re excited to extend our strong partnership with PepsiCo and begin working with the Sandora team and its market-leading brands to capture the growth opportunity in Ukraine,? said Robert C. Pohlad, Chairman and Chief Executive Officer of PepsiAmericas. ?We have a clear strategy to grow and expand our international business and Sandora is a great fit, providing immediate scale in a high growth market.?
?We now serve consumers in over 10 countries in Central and Eastern Europe, in both developing and emerging markets. Combined with our scale and profitability in the U.S., we have a balanced portfolio of markets that position us well for long term sustainable growth.?
As previously announced, PepsiAmericas expects the acquisition to be $0.02 to $0.03 dilutive in 2007. This is included in its previously announced full year earnings per share outlook. The Sandora transaction is expected to add approximately 4 percentage points to volume, lower net pricing by 2 points and cost of goods sold per unit by 1 point, while adding a point to selling, delivery and administrative expenses. The company forecasts that Sandora will add an estimated 1 percentage point to operating profits, driving estimated reported operating profit growth to 15 to 18 percent. This operating income contribution in 2007 will be offset by higher related interest expense and the minority interest recorded primarily for PepsiCo?s 40 percent interest in the joint venture. PepsiAmericas will consolidate the joint venture into its financial results.
The transaction is not expected to have an impact on PepsiCo's previously announced earnings per share guidance for 2007.
About Sandora
Sandora has established itself as the leader in the high growth juice category with a range of distinctly positioned brands that represent approximately half of the total juice volume consumed in Ukraine. With over 3,500 employees, Sandora has a powerful sales and distribution organization and two modern production facilities located in Nikolaev.
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