Blog: Dean BestWho else could PepsiCo be targeting?

Dean Best | 6 December 2010

After its move to buy Wimm-Bill-Dann, the market is rife with speculation about PepsiCo's other M&A targets, as the US food and drink giant looks to expand its so-called "nutrition" business.

PepsiCo's plan to buy Wimm-Bill-Dann, Russia's largest dairy processor, is the company's first significant move in the dairy sector, a business the cola and crisps maker sees as central to its aim of growing sales of healthier food and drinks.

Wimm-Bill-Dann will take PepsiCo's "nutrition" sales from US$10bn a year to $13bn but the US group is targeting sales of $30bn by 2020, meaning more M&A activity is likely - how ever much CFO Hugh Johnston tries to play it down.

In the wake of the Wimm-Bill-Dann deal, PepsiCo was immediately touted as a possible runner in the race for global yoghurt brand Yoplait.

And, on Wall Street, some analysts were discussing whether PepsiCo could make a move for soy-milk brand Silk, owned by Dean Foods, the largest dairy processor in the US and a company that is facing questions over its balance sheet.

The identity of PepsiCo's next target is uncertain. What looks (almost) certain is that chairman and CEO Indra Nooyi will again reach for the chequebook to take PepsiCo to that 2020 sales target.


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