PT Indofood CBP Sukses Makmur has purchased the entirety of PepsiCo’s shares in its snacks joint venture for approximately $35 million, which will see the end of Cheetos and Doritos in Indonesia for three years.
The Indonesian food company has acquired 49% of the total share capital owned by Frito-Lay – an affiliate of PepsiCo – in PT Indofood Fritolay Makmur (IFL) for approximately IDR 494 billion ($35.13 million).
The two companies entered the joint venture back in 1990, in order to produce and distribute Frito-Lay snacks throughout Indonesia.
The deal will see Indofood terminate its licensing agreement with PepsiCo and the share sale must be completed within six months.
Under the terms of the agreement, IFL will cease the production and sale of PepsiCo brand products, namely Cheetos, Lay’s and Doritos. The transaction also states that PepsiCo cannot market any competing products in the country.
“Fritolay, PepsiCo and/or its other affiliates may not manufacture, package, sell, market or distribute any competing snack food products in Indonesia for three years from the expiry of the transition period,” according to the official statement by Indofood CBP.
Indofood CBP manufactures instant noodles, food seasonings, nutrition and special foods. Following completion of the transaction, Indofood’s share ownership in IFL increased from 51% to 99.99%.
© FoodBev Media Ltd 2021
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