PepsiCo joins bottling group in j.v. operation in Russia

by Eric Schroeder
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SOMERS, N.Y. — In a move expected to expand the company’s operations in Russia, PepsiCo, Inc. and The Pepsi Bottling Group, Inc. (P.B.G.) have formed PR Beverages Ltd., a joint venture comprising PepsiCo’s concentrate and P.B.G.’s bottling businesses in Russia.

Under terms of the transaction, P.B.G. will have a majority interest in the joint venture and maintain management of the day-to-day operations. The new company will be governed by a board of directors that includes equal representation from PepsiCo and P.B.G.

"The economic outlook for Russia is very bright," said Eric J. Foss, president and chief executive officer of P.B.G. "This joint venture will enable the Pepsi system to respond more quickly to marketplace dynamics. In addition, we will be in an even better position to strategically invest in Russia to accelerate our growth."

P.B.G. said it will consolidate the joint venture into its financial results, while PepsiCo will recognize the earnings of the joint venture as equity income. The transaction is not expected to have an impact on either company’s previously announced earnings per share or cash flow guidance for 2007.

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