PepsiCo is to form an alliance with Japanese snack maker Calbee Foods to jointly produce and sell a range of food products in Japan.

The joint venture will span a number of product categories, including potato chips, vegetable snacks, breakfast cereal and prawn crackers.

The expanded company will offer a portfolio of brands, including Calbee potato chips, Kappa Ebisen prawn crackers, Jagarico and Jagabee premium potato snacks, Doritos tortilla chips, Cheetos corn snacks and Mike popcorn. The company also will offer vegetable snacks and breakfast cereals.

Under the agreement, PepsiCo will contribute its Frito-Lay Japan business plus an undisclosed amount of cash to Calbee.

In turn, Calbee will issue new stock to PepsiCo, which will result in PepsiCo owning 20% of the expanded company and having a seat on the Calbee board of directors.

Together, the businesses currently generate annual revenues of around US$1.4bn.

"Calbee and PepsiCo share many qualities that will contribute to our mutual success, including our collective drive to satisfy consumer expectations and contribute to healthy lifestyles," said Indra Nooyi, PepsiCo chairman and CEO. "We're delighted at the prospect of creating a market-leading company that will provide a broad range of foods to address the changing needs of consumers across Japan."

The alliance is expected to generate a number of strategic benefits, including leadership in the Japanese snack category, improved R&D capabilities, a 13-plant manufacturing network and increased scale for "more efficient" procurement of raw materials and other goods and services, the companies said.

"The completion of this strategic alliance with PepsiCo represents a significant step forward in our strategy to accelerate our top line growth," said Yasuo Nakata, CEO of Calbee. "We believe we have a huge opportunity to diversify our portfolio by offering products that reflect both Western and Japanese dietary cultures."

Calbee shareholders approved the deal today but the tie-up remains subject to regulatory approval.