MOSCOW: PepsiCo said Thursday that it had won full Russian approval for its acquisition of a local dairy and juices maker that will turn the US giant into the country's biggest food and drinks firms.
The world's second-largest food and beverage company said its purchase of Wimm-Bill-Dann had been approved by Russia's Federal Anti-Monopoly Service as well as the government's commission in charge of foreign investments.
The deal makes Russia PepsiCo's biggest market outside the United States.
"This means that PepsiCo has received all the state agency permits necessary for completing the deal," PepsiCo said in a Russian-language statement.
The company hopes the deal will also help drive its expansion further into Eastern Europe and the former Soviet republics of Central Asia.
The 5.4-billion-dollar (4.1-billion-euros) deal has been in the works for months but still represents a milestone for both PepsiCo and the Russian consumer market.
The acquisition is PepsiCo's largest investment outside the United States and one of the biggest in Russia outside its vast energy sector.
PepsiCo was the first US consumer goods company to break into the Soviet market in 1973 and will now become Russia's largest snacks and drinks maker -- gaining a major advantage over its eternal rival Coca-Cola.
The tie-up was immediately hailed by Russian officials as a sign that foreign investors were looking for new opportunities in the country outside its raw materials base.
"I think its one of the greatest deals for the country and it shows that the investment climate is changing," First Deputy Prime Minister Igor Shuvalov said on the sidelines of the World Economic Forum meeting in Davos.
"We work hard to achieve what is called a new Russia," he said.
Russia has sought to attract foreign direct investments as it tries to recover from a 2009 financial crisis that derailed a modernisation drive intended to wean the country off its dependence on energy revenues.
PepsiCo has worked its way into the deal by investing some $3 billion in Russia over the past decade. It plans to pour another billion dollars into Wimm-Bill-Dann by the end of the year.
"We love Russia," the company's CEO Indra Nooyi said in Davos.
She hailed Wimm-Bill-Dann as "an extremely well-run company" that is going to help PepsiCo become a global player on the dairy market.
The Russian firm is famous at home for its Domik v Derevni (Little House in the Village) milk brand and J7 juices.
Wimm-Bill-Dann -- named in honour of its founder's love for tennis, including the Wimbledon championships -- controls just over 40 percent of Russia juice and 30 percent of its dairy markets.
PepsiCo agreed in December to pay $5.4 billion for a company that has been feted by Prime Minister Vladimir Putin as one of the country's best-managed firms.
The takeover will enable PepsiCo to become not only the country's largest food-and-beverage business but also expand further into eastern Europe and the former Soviet states.
The agreement envisions PepsiCo taking immediate control of a 66-percent stake in Wimm-Bill-Dann for 3.8 billion dollars.
The remaining shares are to be bought progressively in an acquisition that PepsiCo hopes will enable it to establish a 30-billion-dollar nutrition business by 2020.
The combined firm will account for nearly one-tenth of PepsiCo's annualized revenues of 60 million dollars.
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