PepsiCo (PEP) is buying a Chinese company that sells snacks online as it tries to corner more of the world’s largest food and beverage market.
The American soda and snack company said Sunday that the deal to buy Be & Cheery — valued at $705 million — will help Pepsi become “China’s leading consumer-centric food and beverage company.”
Pepsi’s latest investment in China comes as companies struggle to get back to work after the coronavirus outbreak forced many to shut for weeks and depressed business activity. Chinese officials have been urging people to do more shopping online as one way of restricting the spread of the virus.
Be & Cheery, which is based in the eastern Chinese city of Hangzhou, mostly sells nuts, dried fruits and other snacks online. It recorded 171 million yuan ($24.3 million) in net profit last year, a 32% jump from 2018.
The brand’s current owner, Haoxiangni Health Food, bought Be & Cheery in August 2016 for 960 million yuan ($136.5 million). Sunday’s sale price represents a valuation five times that amount.
The Be & Cheery acquisition still needs approval from Haoxiangni shareholders and China’s top market regulators.