Coca-Cola, the world's largest soft-drink maker, has applied for Russian regulator approval to buy into juice maker Nidan Soki, sources said Thursday, as it seeks to challenge rival PepsiCo's market dominance.
In January, sources familiar with the deal said Coca-Cola was considering buying a controlling stake in Nidan from private equity group Lion Capital.
Coca-Cola is vying with PepsiCo to expand in a market that Euromonitor International estimates was worth $3.2 billion last year.
If successful, the deal would push Coca-Cola to No. 1 in the Russian juice market, leapfrogging PepsiCo, which currently has a 30 percent market share through its Lebedyansky juice maker, according to Euromonitor. Coca-Cola Hellenic Bottling has a 20.5 percent market share, while Nidan’s is 14.5 percent, the research company says.
Moscow-based Nidan, the maker of Moya Semya and Ya juices, may be valued at between $560 million and $620 million, based on estimated 2009 sales of $280 million and earnings before interest, depreciation and amortization of $60 million, said Tatyana Bobrovskaya, an analyst at BCS Financial Group.
Nidan’s revenue fell 7 percent to 8.02 billion rubles ($274 million) in 2008, according to an annual report posted on the company’s web site. Net income totaled 116.2 million rubles.
Coca-Cola already has a significant stake in the Russian juice market through Multon, which has a nearly 22 percent market share, according to research group Business Analitika.
"All the necessary agreements have been reached. It remains to get approval from the Federal Anti-Monopoly Service," a source close to the U.S. beverage giant said.
The source said that Coca-Cola was hoping to get approval in a three- to nine-month period. A source in the watchdog confirmed that it had received an application from Coca-Cola.
(Reuters, Bloomberg)
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