PepsiCo deploys cold war hero Kendall to secure takeover of Wimm-Bill-Dann Dairy & Juice Co
NEW YORK: Don Kendall made a name for himself by giving Soviet leader Nikita Khrushchev his first taste of Pepsi. The 89-year-old former PepsiCo Inc. chief executive officer can also take some credit for the company's latest move in Russia-the takeover of Wimm-Bill-Dann Dairy & Juice Co.
Kendall joined current CEO Indra Nooyi in Russia this week to help secure Prime Minister Vladimir Putin's blessing for the deal. Nooyi said in an interview today that Kendall immediately agreed to fly to Russia when she called him on Nov. 28 to come to the meeting.
"He is Mr. Pepsi," Nooyi said. "He just said, 'When do you want me to hop on the plane, and tell me what it's for, and I'm ready to go.'"
The $3.8 billion purchase of the majority stake in Wimm-Bill-Dann makes PepsiCo Russia's biggest food and beverage company. Putin's approval means PepsiCo is now poised to wrest back the lead in Russia's juice and dairy market from Coca-Cola Co. as both companies make acquisitions in the region. PepsiCo, based in Purchase, New York, entered the Russian market 15 years after Khrushchev's first sip of Pepsi in 1959.
Nooyi and Kendall talked with Putin, 58, about the billions PepsiCo had invested in Russia and how it could use Wimm-Bill-Dann as a springboard to expand in the region, said people with knowledge of the talks.
The executives also discussed how the takeover was evidence that the nation is open to Western investment, according to the people, who declined to be identified because the meeting was private.
"It's serves a wonderful role in helping us kick-start our dairy business," Nooyi said. PepsiCo plans to integrate dairy products into snacks and drinks, not just sell packaged milk. "This is a very, very important strategic move."
PepsiCo had considered buying Wimm-Bill-Dann for years and was able to pursue a deal after Danone SA agreed to sell its 18 percent stake in Wimm-Bill-Dann in August, two people said. Danone divested the holding to address antitrust concerns in Russia after buying another dairy company in the country.
Talks fired up with a chance meeting in September between PepsiCo and WimmBill-Dann executives at an industry conference in Europe, said the person. Soon, the companies were in exclusive negotiations.
By October, Wimm-BillDann became concerned word of the discussions with Nooyi would be leaked and anger the Russian government, which doesn't like to learn of foreign investment through media reports, according to the people. PepsiCo was concerned that Coca-Cola and others might bid, the people said. -Ap
OSTERSUND: Russia's Svetlana Sleptsova (L) and Germany's Kathrin Hitzer ski during the women's 10 km biathlon pursuit during the World Cup competitions in Ostersund. -Reuters