US: PepsiAmericas, Central America Beverage Corp sign JV deal

PepsiAmericas is to set up a joint venture with Central America Beverage Corporation (Cabcorp) to serve Caribbean and Central American soft drinks markets.

The deal will see PepsiAmericas' Caribbean business, excluding the Bahamas, combined with Cabcorp's Central American business, PepsiAmericas announced today.

Cabcorp, which had sales of US$480m in 2008, will take an 82% stake in the venture. Financial details were not disclosed.

Carlos Enrique Mata Castillo, president of Cabcorp, said: "The combination of our product offerings, territories and sales capabilities in Central America and the Caribbean should put Cabcorp in a stronger position to take advantage of future expansion opportunities in the region."

Robert Pohlad, chairman and CEO of PepsiAmericas, added: "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 two companies expect the transaction to close in the third quarter of this year. PepsiAmericas said it does not expect the deal to materially impact its previously announced 2009 adjusted earnings per share outlook.

The move comes barely more than a week after PepsiAmericas joined Pepsi Bottling Group in rejecting a takeover proposal from the firms' parent group, PepsiCo. In rejecting the combined $6bn deal, both bottlers accused PepsiCo of undervaluing their businesses.