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PepsiCo Buys Chinese Snack Company Be & Cheery for $700 Million

By Demitri Kalogeropoulos – Feb 24, 2020 at 8:27AM

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The acquisition gives Pepsi an instant boost in a major growth market.

PepsiCo (PEP -1.22%) announced over the weekend that it has struck a deal to purchase a Chinese online snack retailer for $700 million . Be & Cheery sells nuts, dried fruits, meat snacks, and baked goods in the country through its robust e-commerce sales platform.

A woman snacks on a protein bar.

Image source: Getty Images.

About the deal

The acquisition brings one of China's biggest online snack marketers under the Pepsi umbrella. It checks two major growth boxes, given its focus on e-commerce and its established portfolio in the booming China geography. "Be & Cheery is highly complementary to our existing China business," a Pepsi executive said in a press release. The acquisition will give Pepsi instant infrastructure to deliver snacks, plus a wealth of real-time consumer spending data.

Looking ahead

Pepsi's snack food segment has been outgrowing its beverage division for more than a year, and investors are expecting that trend to continue in 2020. With this major acquisition, the company is signaling that it sees more potential for sales gains in this niche, especially in developing countries. The buyout also confirms that Pepsi is serious about attempting to build a durable market leadership position in the world's second biggest economy.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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