PepsiCo has announced plans to fully acquire Israel’s Strauss Group from their joint ventures, Sabra and Obela, specializing in dips.
While the financial details of the transaction remain undisclosed by PepsiCo, Strauss Group revealed that the buyout will total $243.8 million. Of this amount, $240.8 million—including a shareholder loan—will be allocated to the Sabra Dipping Company, while the remainder will be for Obela.
Both ventures have been operating for over a decade; Sabra, focusing on the North American market, was established in 2008, and Obela, serving Australia, New Zealand, and Mexico, was formed in 2011.
“As we evolve our food portfolio and bring people more choices for more occasions, our aim is to meet the growing demand for positive choices and on-the-go options,” stated Steven Williams, CEO of PepsiCo’s North American foods division. He added that nutritious and straightforward options such as refrigerated dips and spreads are a segment in which PepsiCo has long sought to expand in the US and Canada.
In the first half of 2024, Sabra’s sales, net to Strauss’s 50% interest, stood at NIS220 million, reflecting a decrease of 0.6%. For the second quarter, sales were reported at NIS110 million, showing a decline of 5.5% compared to the same period in 2023.
Recent data from Strauss Group indicates that Sabra registered an operating profit of NIS4 million in the first half of the year, while Obela encountered an operating loss of NIS1 million.
Additionally, PepsiCo and Strauss have reached an agreement regarding their Strauss Frito-Lay joint venture, which focuses on salty snacks within Israel. Specifically, the Doritos maker has provided Strauss Group with an option to purchase up to 2.5% of Strauss Frito-Lay’s share capital for an exercise price of up to $9.9 million; Strauss Group has already invested $100,000 for this option.
Notably, last month, PepsiCo confirmed a significant deal to acquire Siete Foods, a Mexican-American snacks company, for a substantial fee of $1.2 billion. Founded in 2014 by Veronica Garza and her family in Austin, Texas, Siete Foods specializes in producing grain-free and dairy-free Mexican-American foods.
Through these strategic moves, PepsiCo aims to stay ahead in food and beverage industry trends, enhancing its portfolio in response to evolving food and drink consumer trends. As the food and drink business continues to shift, these acquisitions are pivotal for PepsiCo’s growth and market adaptability.
