DOW JONES NEWSWIRES
PepsiAmericas Inc. (PAS) said Monday it has formed a joint
venture with Guatemala's bottling company Central America Beverage
Corp., or Cabcorp, to combine their businesses in Central America
and the Caribbean.
Financial terms weren't disclosed.
Under the deal, Cabcorp will control 82% of the combined
company, while PepsiAmericas will have the remaining 18%, the
company said in a press release.
In addition to the PepsiCo brands, the joint venture will
produce and sell an expanded product portfolio in the region.
"The combination of our Caribbean business with Cabcorp provides
the best strategic alternative to create value from this region,"
PepsiAmericas Chairman and Chief Executive Robert C. Pohlad said in
the release. "In addition to leveraging scale and expertise, we
believe the formation of this joint venture will allow us to
participate in the higher growth Latin American markets where
Cabcorp currently operates."
The joint venture will include Cabcorp's operations in
Guatemala, Honduras, El Salvador and Nicaragua. PepsiAmericas'
business in the Bahamas will not be part of the deal.
PepsiAmericas expects this transaction, which is expected to
close in the third quarter, will not materially impact its 2009
adjusted earnings per share outlook.
The boards of both companies approved the terms of the joint
venture.
The move comes less than two weeks after PepsiAmericas rejected
PepsiCo Inc.'s (PEP) offer to buy the rest of the company it
doesn't already own, calling it unacceptable. Pepsi made the nearly
$1.7 billion cash-and-stock offer for the remaining 57% of
PepsiAmericas last month.
Cabcorp, founded in 1885, is the 12th largest company in Central
America with sales of $480 million in 2008, according to the
release. It has been distributing, manufacturing and selling
Pepsi-Cola products since 1942.
PepsiAmericas is the world's second-largest manufacturer, seller
and distributor of PepsiCo beverages.
PepsiAmericas shares recently traded 2 cents lower at
$25.42.
-By Dick Streuly, Dow Jones Newswires; 201-938-2170;
dick.streuly@dowjones.com