Pep­siCo de­ploys cold war hero Ken­dall to se­cure takeover of Wimm-Bill-Dann Dairy & Juice Co

The Pak Banker - - International3 -

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

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