Abstract

In October 2024, global food, snack, and beverage major PepsiCo, Inc. (PepsiCo) entered into an agreement to acquire Garza Food Ventures LLC, dba Siete Foods (Siete Foods), a Mexican-American food brand, for US$ 1.2 billion. The acquisition would enable PepsiCo to expand its food portfolio and offer its customers snacks with more positive choices and simple ingredients. Before the acquisition of Siete Foods, PepsiCo had acquired food companies such as Bare Snacks, Pop Corners, and Health Warrior. Analysts opined that the acquisition of Siete Foods was aligned with PepsiCo’s strategy of diversifying its product portfolio and would help it counter the competition in the market. Experts also stated that the acquisition would lead to increased growth and revenues for PepsiCo. However, others were of the opinion that the acquisition would lead to a compromise in the quality of the food products of Siete and that there was a likelihood of the prices of Siete Foods products being increased. It remained to be seen how the acquisition would help PepsiCo strengthen its position in the nutritious food segment.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Discuss the various factors which influence the acquisition strategy of a company.
• Examine the risks involved in an acquisition.
• Explore the reasons for a company to go in for product diversification.

Keywords

PepsiCo; Seite Foods; acquisition; healthy snacks; strategic acquisition; product diversification; nutritious food segment