24 June 2009 - PepsiCo, one of the world's largest food and beverage companies, announced today that it will form a strategic alliance with Calbee Foods Company to jointly produce and sell a wide range of food products in Japan, such as potato chips, vegetable snacks, breakfast cereal and prawn crackers.
The agreement was approved today by shareholders of Calbee, Japan's largest snack company. Under the agreement, PepsiCo will contribute its Frito-Lay Japan business plus an undisclosed amount of cash to Calbee. Calbee in turn will issue new stock to PepsiCo, which will result in PepsiCo owning 20 percent of the expanded company and having a seat on the Calbee board of directors. Together, the businesses currently generate annual revenues of approximately $1.4 billion. The strategic alliance is subject to approval of Japanese government authority.
"Calbee and PepsiCo share many qualities that will contribute to our mutual success, including our collective drive to satisfy consumer expectations and contribute to healthy lifestyles," said Indra Nooyi, PepsiCo chairman and chief executive officer. "We at PepsiCo have long admired Calbee as a well-managed company that uses innovative technology in pursuit of purity and simplicity and makes every effort to maximize the nutritional value of its products. We're delighted at the prospect of creating a market-leading company that will provide a broad range of foods to address the changing needs of consumers across Japan."
"The completion of this strategic alliance with PepsiCo represents a significant step forward in our strategy to accelerate our top line growth," said Yasuo Nakata, chief executive officer of Calbee. "We believe we have a huge opportunity to diversify our portfolio by offering products that reflect both Western and Japanese dietary cultures. By sharing experience and expertise with PepsiCo, we can enhance the quality of our products and quickly seize attractive growth opportunities. We will continue to satisfy the needs and expectations of our customers around the world in their search for quality products to meet their changing lifestyle needs."
Calbee and PepsiCo are highly complementary companies whose alliance is expected to provide a variety of strategic benefits to support their continued growth in Japan, including:
-- Leadership in major snack categories, including potato snacks and prawn crackers (Calbee) and corn snacks (PepsiCo)
-- World-class research and development capabilities, including Calbee's extensive research and development center and PepsiCo's global snack innovation resources
-- A sales and distribution system capable of reaching consumers across Japan
-- A 13-plant manufacturing network
-- Increased scale for more efficient procurement of raw materials and other goods and services
The expanded company will offer a strong portfolio of highly-regarded brands, including: Calbee potato chips, Kappa Ebisen prawn crackers, Jagarico and Jagabee premium potato snacks, Doritos tortilla chips, Cheetos corn snacks and Mike popcorn. The company also will offer vegetable snacks and breakfast cereals.
PepsiCo was advised in the transaction by Foxmark Strategic Partners in Tokyo.