Denmark's Carlsberg has agreed to acquire PepsiCo's bottling operations in Georgia and Armenia, taking over the production, sales and distribution of the US company's soft drinks in both countries. Financial terms of the deal were not disclosed.
The acquisitions include Iberia Refreshments in Georgia and JI Pepsi Cola Bottler Armenia. The seller is Revery, the current owner of both businesses. The deal for the Armenian company is subject to approval by the Armenian government.
Partnership to cover 17 markets
After the deals close, Carlsberg will have bottling agreements with PepsiCo in 17 markets. The Danish group already works with the American company in the UK, Ireland, Norway, Sweden, Switzerland, Kazakhstan, Kyrgyzstan, Laos and Cambodia.
The partnership will expand to other countries. From 2027, Carlsberg is to take over PepsiCo's bottling in Azerbaijan, and from 2029, the arrangements will cover Denmark, Finland, Estonia, Latvia and Lithuania.
Carlsberg defines Georgia, Armenia and Azerbaijan as a regional cluster in the South Caucasus. According to the company, the merger of the three markets will create a platform for the development of a broader portfolio of beverages in the region.
Analyst: Short-term effect will be limited
“The main thing for investors is not the two markets themselves, but the signal of an increasingly close relationship between Carlsberg and PepsiCo“, said Jyske Bank analyst Haider Anjum, quoted by Reuters.
According to Anjum's assessment, the deals are unlikely to have a significant impact on Carlsberg's revenue or profit in the short term. However, closer cooperation could lead to expanded synergies between the two companies and access to new markets.
“The expanded partnership will provide a strong platform for further development of a full portfolio of beverages in the region“, said Nikos Kalaitzidakis, Carlsberg’s Executive Vice President for Central and Eastern Europe and India.
The transfer of the business in Armenia will be subject to regulatory approval. Once the necessary procedures are completed, Georgia and Armenia will become operational markets for Carlsberg within the framework of the expanded partnership with PepsiCo.