Pepsi To Acquire One of China's Largest Snack Brands In $705M Deal

PepsiCo, Inc. (NASDAQ: PEP) has announced that it will acquire Be & Cherry, a large Chinese snackmaker from Haoxiangni Health Food Co., Ltd.

What Happened

PepsiCo said in a statement released Sunday that it would purchase Hangzhou Haomusi Food Co. Ltd., also known as Be & Cherry, for $705 million from Haoxiangni.

Ram Krishnan, CEO of PepsiCo Greater China, said in a statement that Be & Cherry is “highly complementary” to Pepsi’s existing Chinese business due to its broad product portfolio, asset-light model, and a focus on e-commerce.

Haoqun Qiu, Chairman of Be & Cherry, said, “We are thrilled to be joining the PepsiCo family.” He added, “PepsiCo and Be & Cheery are jointly confident in the prospects for China’s snacks industry and share a commitment to invest in consumer-led and digitalized capabilities.” 

Why It Matters

PepsiCo has operated in China for nearly 40 years, and this transaction will allow them to become China’s “leading consumer-centric food and beverage company.”

The sale of Be & Cherry would allow Haoxiangni to focus on rural revitalization, agricultural products, and its jujube business. 

Hangzhou based Be & Cherry is considered to be one of the largest e-commerce snack companies in China and has revenues of nearly 5 billion yuan or $711.7 million as of 2019.

Price Action

PepsiCo shares traded 0.034% higher at $145.90 in the after-hours session on Friday. The shares had closed the regular session 0.48% higher at $145.85.

Haoxiangni shares traded 0.71% at $1.60 higher at press time in Shenzhen.