Monday, software giants PepsiCo (PEP) and international food and beverage company Strauss Group announced the completion of the formation of a 50-50 joint venture partnership to operate hummus maker Sabra. Financial terms of the deal were not disclosed.
Queens, NY-based Sabra is a rapidly growing company, which ships its variety of more than 26 Mediterranean spreads and dips nationwide and is one of the leading makers of hummus. Sabra had sales of $65 million in 2007. Last year, total U.S. sales of hummus grew to $192 million. Hummus is a dip or spread made mainly from chickpeas and is a dietary staple in the Middle East. Sabra's hummus is made with healthier oils and has no trans fat or cholesterol.
PepsiCo and Strauss said that the Sabra joint venture, the agreement for which had been signed in December 2007, would produce and sell fresh dips and spreads in America and Canada, with the help of the marketing expertise of both Strauss Group and Frito-Lay North America or FLNA.
Israel based food and beverage company Strauss Group's business consists of three main divisions. These are the health and wellness division, which includes fresh foods; the fun and indulgence division, which focuses on development of the Max Brenner brand of chocolates; and the coffee division. In North America, the Group's health and wellness business is being led by Sabra.
Frito-Lay, based in Plano, TX, is the $11 billion convenience food division of PepsiCo which manufactures, markets and sells a variety of corn chips, potato chips and other snack foods.
Commenting on the deal, Al Carey, president and chief executive officer of Frito-Lay North America said, Sabra's products are a natural complement to Frito-Lay's offerings, particularly our Stacy's pita chips.
Erez Vigodman, president and chief executive officer of Strauss Group added, The partnership between Frito-Lay and Strauss will create a complementary set of competencies and expertise that will allow Sabra to lead the fresh dip category and offer consumers in North America a range of fresh dips that meets their desire for healthier, fresh foods."
PepsiCo has already signed two other major transactions this month, mainly with the aim of consolidating its presence in the Russian market.
On March 17, Pepsi Bottling Group, Inc. (PBG) announced that the company and PepsiCo, through their Russian joint ventures PR Beverages Ltd, inked a deal to buy Privately held Sobol-Aqua JSC. The deal is expected to close in the second quarter.
On March 21, PepsiCo reported that it has agreed to form a joint venture with PBG to acquire Russian juice company, JSC Lebedyansky, excluding its baby food and mineral water business, for US$1.4 billion. The deal is not expected to be completed before the third quarter. PEP shares are trading up 20 cents or 0.28% at $71.76, in pre-market trading.
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