Pespico finds winning takeover formula in Russia

RUSSIA HAS BEEN a graveyard for several global brands – BP, Daimler Chrysler and Siemens have all faced difficulties – so Pepsico’s deal to buy one of the country’s most trusted dairy companies has to be seen as a triumph. Pepsi is paying $5.4bn for the memorably named Wimm-Bill-Dann and attributes its success to three factors. First is deep and long-term commitments to Russia: the company’s former CEO, Donald Kendall, first travelled to the country 50 years ago meeting Nikita Kruschev so was on familiar territory when he signed the deal direct with Vladimir Putin. Second they employ local managers: Pepsico already has a 75% stake in the Russia’s leading juice maker and has made a habit of investing in local staff rather than an army of ex-pats. Finally, the company has made a commitment to developing new international markets for WBD’s products which include Keffir, a fermented milk drink. They are perhaps wise not to have said exactly which international markets they anticipate selling Keffir into.