LOTTE Chilsung Beverage Co., one of the biggest beverage companies in South Korea, has offered to buy all of the shares of bottler Pepsi-Cola Products Philippines Inc. that it still does not own.
Shares of Pepsi-Cola were suspended for trading as a result of the offer.
In its disclosure Lotte Chilsung, the owner of brands such as Milkis aside from other popular Pepsi-Cola brands, is buying some 2.13 billion common shares of the local bottling firm or about 57.78 percent for P1.95 apiece, or a premium from its P1.40 per share close on Tuesday.
The deal is worth about P4.15 billion.
Lotte Corp. already owns at least 38.88
percent of Pepsi-Cola.
Pepsi-Cola suffered a net loss of P65.95 million for the third quarter ending
September, deeper than last year’s loss of P32.55 million. For the nine months
of the year, however, it still reported a net income of P380.1 million, a
turnaround from last year’s loss of P81.19 million.
The company on Wednesday also said it formalized the halting of its local manufacture of Cheetos snack franchise.
“Successfully reaching this agreement allows PCPPI to advance and renew its focus and commitment to a more sustainable future, while optimizing and strengthening the production and distribution of carbonated and non-carbonated beverages to millions nationwide, with the brands Filipinos love,” it said in its disclosure.
“PepsiCo will continue to import and sell Cheetos in the Philippines, along with its other brands of snacks,” it said.
Pepsi-Cola started locally producing Cheetos in 2015, spending some P650 million for its entry in the junk food market in the country, where it competed head-on with main players Universal Robina Corp., Liwayway Holdings Co. Ltd. and Leslie Corp., among others.
The company has been booking start-up losses from its snacks line since the start of production.
Its snacks line, meanwhile, has been contributing little to its revenues. Last year, snacks line generated some P200 million in net sales out of the P33.59 billion in total. That figure is lower than the P267 million it sold in 2017.
For the six months of the year ending June, its snacks line contributed sales of P50 million as against the P20.87 billion worth of gross sales from its carbonated and non-carbonated drinks.