The Indian government has reportedly given PepsiCo the green light to acquire one of its franchisees, while stipulating that the group must divest 49% of its equity within five years.
PepsiCo India Holdings had asked the Foreign Investment Promotion Board (FIPB) for permission to acquire the Dhillon Kool Drinks and Beverages Ltd via its subsidiary, Aradhana Soft Drink Company. PepsiCo India Holdings had stated that the franchisee was facing an “enormous financial crisis”.
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According to reports, the FIPB cleared the proposal late last month and has sent the application to the Commerce and Industry Minister for approval.
Sources have indicated that the approval was granted on condition that 49% of the equity be divested within five years. According to the sources, PepsiCo had itself agreed to the divestment criteria in its application.
