PepsiCo, Inc (NASDAQ:PEP) announced plans to acquire Be & Cherry, a large Chinese snackmaker from Haoxiangni Health Food Co., Ltd, for $705 million.
The acquisition brings one of China's biggest online snack marketers under the Pepsi umbrella. It checks two major growth boxes, given its focus on e-commerce and its established portfolio in the booming China geography.
"Be & Cheery is highly complementary to our existing China business," a Pepsi executive said in a press release. The acquisition will give Pepsi instant infrastructure to deliver snacks, plus a wealth of real-time consumer spending data.
Pepsi's snack food segment has been outgrowing its beverage division for more than a year, and investors are expecting that trend to continue in 2020.
With this major acquisition, the company is signaling that it sees more potential for sales gains in this niche, especially in developing countries.
The buyout also confirms that Pepsi is serious about attempting to build a durable market leadership position in the world's second biggest economy.
PepsiCo was also in the news recently, declaring plans in January to achieve 100% renewable electricity for its U.S. direct operations this year. The U.S. is the food and beverage company's largest market and accounts for nearly half of its total global electricity consumption.
PepsiCo's efforts in the U.S. build upon its global progress in switching to renewable electricity around the world.
PEP shares picked up 55 cents to $146.40
