US snacks and soft drinks giant PepsiCo has announced that it has signed an agreement with General Mills to buy the US food company's 40.5% stake in their Snack Ventures Europe (SVE) joint venture for US$750m.

After the transaction, which is expected to be completed in early 2005, the SVE joint venture and its operations will be wholly owned by PepsiCo.

Snack Ventures Europe was established in July 1992 by combining General Mills' savoury snack and sweet biscuit businesses in Belgium, France and The Netherlands with PepsiCo's salty and sweet snack businesses in Greece, Portugal and Spain. The venture is continental Europe's largest snack food company, with annual sales of more than US$1bn. Products marketed by SVE include: 3-Ds, Bugles, Doritos, Fritos, Hamka's, Lay's, Ruffles and Dippas.

General Mills said it intends to use the proceeds from the transaction to reduce debt. The company also said that it expects its 2005 net earnings per share to include a gain from the transaction. Excluding this one-time gain, General Mills reaffirmed its 2005 earnings target of $2.75 to $2.80 per share.