Sept. 3 – The Coca-Cola Company said yesterday it has purchased one of Russia’s biggest juice-makers, Nidan Soki, as part of its plans to expand in the fast-growing market.
The world’s largest soft-drink maker bought a 75 percent stake in Nidan from London-based private-equity company Lion Capital, with the remaining 25 percent held by Nidan’s founders – Russian businessmen Igor Shilov and Leonid Shayman, and their Hungarian partner Chaba Baleyr Layosh.
The Coca-Cola Company applied in March to buy a majority stake in Nidan, the country’s fourth largest juice maker, in a deal that pushed the company to number one in the Russian juice market, leapfrogging its biggest rival PepsiCo.
PepsiCo has acquired a 75 percent stake in another Russian juice maker, Lebedyansky, in 2008, giving it an upper hand on the local market.
“Coca-Cola’s leadership became less clear after PepsiCo’s acquisition of Lebedyansky. Acquiring Russian brands is a way to compete,” Ilya Plakhinas, head of the marketing division at Soldis Communications said to The Moscow Times.
Coca-Cola, which has invested US$2 billion in Russia over the past two decades, didn’t disclose how much it paid for Nidan, but plans to spend as much as US$1 billion in additional investments in its Russian facilities over the next few years, the company said in a statement.
Nidan Juices Soki controls 17 percent of the Russian juice market and is the leader in Siberia with a 43 percent market share, said a company press release.
The juice-maker has facilities in Novosibirsk (SP Nidan-Ecofruit) and the Moscow region town of Kotelniki (Nidan-Gross). The company’s distribution network covers all of the Russian territories and also includes the Ukraine, Kazakhstan, Kyrgyzstan, Belarus, Mongolia, Uzbekistan, Moldova, Georgia and Armenia.
“The deal shows Coca-Cola’s confidence in Russia’s big potential and its commitment to invest more in the future,” Ahmet Bozer, president of The Coca-Cola Company’s Eurasia and Africa Group said. “This acquisition represents our continued belief in Russia and commitment to provide a wide array of beverage choices to Russian consumers.We will grow as Russia grows through ongoing investments and building a sustainable business model.”
The sides declined to disclose, but analysts said the value of the deal was probably no more than US$450 million, including Nidan’s debts.
The U.S. beverage giant may have paid up to US$300 million excluding debt, Kommersant reported Wednesday, citing sources close to the deal.
Coca-Cola hopes the deal will help it grow in Russia, particularly in the market for non-carbonated drinks, the company said.
“It’s an important deal for The Coca-Cola Company,” said Zoran Vucinic, Coca-Cola president in Russia, Ukraine and Belarus. “Our long-term strategy in Russia is focused on the growth of sales volume, increasing investment and creating new jobs. Partnering with Nidan allows us to reach each of these purposes.”
