MANILA, Philippines - Lotte Chilsung Beverage Co. Ltd. a subsidiary of South Korea's Lotte Group, has bought a 34.4% stake in local beverage firm Pepsi-Cola Products Philippines Inc. (PCPPI).
The acquisition makes Lotte Chilsung the single biggest shareholder of PCPPI followed by Pepsi-Co, which will keep 29.5% of the beverage company.
The cost of acquiring PCPPI was not disclosed.
PCPPI Executive Vice President Partha Chakrabarti said on Thursday the shares bought by Lotte Chilsung represent combined stakes of Guoco Inc., Hong Way and other minority shareholders.
The shares were pegged at P3.50, which is a 23% premium over PCPPI's closing price of P2.83 last Tuesday.
PCPPI voluntary suspended the trading of its shares pending the announcement of the acquisition.
Since Lottle Chilsung's purchase were less than 35%, it is not required to conduct a tender offer.
PCPPI President and CEO Micky Yong said the acquisition should boost PCPPI.
"Lotte will bring into the Philippines its experience and resources to continue the growth momentum of PCPPI in the country's highly competitive beverage industry which recently has started to expand again due to the country's improved economic fundamentals."
Lotte Chilsung CEO Hwang Chung said that Lotte's acquisition of a stake in PCPPI is part of the firm's strategy to expand its presence in the Southeast Asian market.
"The acquisition of PCPPI will be a great milestone and contribute to achieving our vision of becoming Asia top ten group in 2018," Chung said.
Lotte Chilsung has been Pepsi-Co's bottler in Korea for more than 30 years and currently controls 40% of the softdrinks market.
For the fiscal year end June 2010, PCPPI posted a net income of P738 million, slightly lower than the P799 million posted in the same period a year ago, while net sales totaled P16.1 billion in fiscal year 2010, up from P14.2 billion in 2009.
Currently, Lotte Chilsung has 2 units in China and one branch in Russia.
The Lotte Group which last year raked in sales of $45 billion, is engaged in various businesses such as food and beveerage, retail, travel and tourism, petrochemicals.
PCPPI operates 11 bottling plants nationwide, producing products such as Pepsi, Seven Up, Mountain Dew, Mirinda, Mug Root Beer, Gatorade, Tropicana, Propel and Sting.