PepsiCo is to acquire South Africa’s Pioneer Foods for $1.7bn, expanding the US fizzy drinks and snacks company’s footprint in the African market as it diversifies under a new chief executive.

The two companies said on Friday that Pepsi has agreed to buy Piooner’s outstanding shares for 110.00 South African rand per share in cash, valuing the deal at approximately $1.7bn. Shares traded at 77 rand at the close on Thursday.

The acquisition will help Pepsi “gain a solid beachhead for expansion into Sub-Saharan Africa,” the maker of Tropicana, Walkers Crisps and the eponymous fizzy drink said, as it boosts its manufacturing and distribution presence on the continent.

“Pioneer Foods forms an important part of our strategy to not only expand in South Africa, but further into sub-Saharan Africa as well,” said Pepsi chairman and chief executive Ramon Laguarta.

Mr Laguarta replaced Indra Nooyi at the helm of Pepsi last October, and has stepped up investments including a push into products such as juices, teas and sports drinks as consumers shift their tastes into healthier products.

Pioneer Foods sells cereals, juices and other snacks, via brands such as Weet-Bix, Liqui-Fruit and Ceres.

UBS, JPMorgan and Centerview acted as financial advisers to PepsiCo. PSG Capital acted as corporate and transaction adviser to Pioneer Foods.

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