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Pepsico India acquires FOBO in Haryana, Himachal
New Delhi, Aug 17: Pepsico India has acquired franchisee-owned bottling operations (FOBO) in Haryana and Himachal Pradesh and is close to completing the takeover of its Punjab bottler.
New Delhi, Aug 17: Pepsico India has acquired franchisee-owned bottling operations (FOBO) in Haryana and Himachal Pradesh and is close to completing the takeover of its Punjab bottler.
However, as per the entry-level condition imposed on the company since 1995, it will have to divest up to 49 per cent equity in each of these acquisitions by 2008.
Sources confirmed the acquisition of the two bottling operations, adding both had been taken over from Dhillon Cold Drinks due to the latter's precarious financial position.
After this conversion of a franchisee-owned bottling operation (FOBO) into a company-owned one (COBO), majority 58 per cent of Pepsico's business in India will be accounted for by COBOs. When contacted, Pepsico India chief Rajeev Bakshi confirmed the acquisition of bottlers in Haryana and Himachal Pradesh while adding that due diligence was on for acquiring bottling operations in Punjab.
However, he declined to provide further details of the deal including its worth.
Asked whether the company would continue with further acquisitions of bottlers in India, he said, "We have acquired Dhillon Cold Drinks because they were facing financial problems."
While no figure was available on the turnover of the two acquired bottlers, sources said the Punjab operations is about one-and-a-half times the size of the Delhi market for Pepsi.
Pepsi is believed to have brought in about half-a-billion dollars in India since setting shop here in terms of foreign direct investment but sources said these deals had been finalised through a mix of internal accruals of the Indian subsidiary and from other ventures here.
Last week, regretting the controversy over alleged presence of pesticides in soft drinks, Bakshi had said such incidents were destabilising for multinational companies operating in India.
"Any US or multinational company wants a stable, predictable environment to operate in....These incidents are highly destabilising. They dampen sentiment," he said.
Asked about any adverse impact the Centre for Science and Environment (CSE) findings on pesticide levels in soft drinks could have on the company's sales, Bakshi declined to comment.
On whether the company would alter its advertising and communication strategy in the wake of this controversy, Bakshi said if the issue gets resolved in the near future the strategy will remain unaltered.
The company will create more public awareness about the impeccable quality of its products in future communication, he added. Bureau Report
Sources confirmed the acquisition of the two bottling operations, adding both had been taken over from Dhillon Cold Drinks due to the latter's precarious financial position.
After this conversion of a franchisee-owned bottling operation (FOBO) into a company-owned one (COBO), majority 58 per cent of Pepsico's business in India will be accounted for by COBOs. When contacted, Pepsico India chief Rajeev Bakshi confirmed the acquisition of bottlers in Haryana and Himachal Pradesh while adding that due diligence was on for acquiring bottling operations in Punjab.
However, he declined to provide further details of the deal including its worth.
Asked whether the company would continue with further acquisitions of bottlers in India, he said, "We have acquired Dhillon Cold Drinks because they were facing financial problems."
While no figure was available on the turnover of the two acquired bottlers, sources said the Punjab operations is about one-and-a-half times the size of the Delhi market for Pepsi.
Pepsi is believed to have brought in about half-a-billion dollars in India since setting shop here in terms of foreign direct investment but sources said these deals had been finalised through a mix of internal accruals of the Indian subsidiary and from other ventures here.
Last week, regretting the controversy over alleged presence of pesticides in soft drinks, Bakshi had said such incidents were destabilising for multinational companies operating in India.
"Any US or multinational company wants a stable, predictable environment to operate in....These incidents are highly destabilising. They dampen sentiment," he said.
Asked about any adverse impact the Centre for Science and Environment (CSE) findings on pesticide levels in soft drinks could have on the company's sales, Bakshi declined to comment.
On whether the company would alter its advertising and communication strategy in the wake of this controversy, Bakshi said if the issue gets resolved in the near future the strategy will remain unaltered.
The company will create more public awareness about the impeccable quality of its products in future communication, he added. Bureau Report