The Competition Commission of Pakistan (CCP) this week approved the merger of PepsiCo manufacturer Shamim & Co. Bottling Company (SCL) and sugar producer JKSM.
The cost-saving move will “streamline procedures” and result in a reduction in overheads and “working expenses”, the CCP said.
Just Drinks has contacted PepsiCo and SCL for more information on the impact of the deal.
Multan-headquartered SCL has manufactured and distributed PepsiCo products in Pakistan since 1967. Its brands include Sting energy drink, Mountain Dew, 7 Up, Mirinda and Slice.
JKSM produces and sells sugar and sugar-based products in Pakistan, including refined white sugar. It also sells sugar by-products including molasses, bagasse and mud.
Following the merger, SCL will be dissolved. JKSM’s board of directors will continue to serve as directors of the merged entity.
In a statement this week (8 July), the CCP said: “Post-transaction, SCL’s market shares in ‘non-alcoholic beverages’ will remain unchanged posing no threat for creation of dominance by JKSM.
“The proposed transaction would result in benefits in saving costs through streamlining procedures and reduction in overhead and working expenses.
“There will be an increase in efficiency after the unified control. Improvement in the operations shall ultimately benefit shareholders, employees, customers and others generally.”
In it’s first-quarter results, PepsiCo’s Africa, Middle East and South Asia region grew beverage sales volumes 2%, while its snacks division grew 4.5%. GAAP operating profit fell by 10% to $152m in the 12 weeks to 23 March 2024.
Net revenue in the region grew from $1.02bn in Q1 2023, to $1.04bn in the same period of 2024. Group net revenue for the period was $18.25bn, while GAAP operating profit grew 3% to $2.72bn.
Last year, Coke bottler Coca-Cola Icecek secured competition approval in Pakistan for its acquisition of The Coca-Cola Co.’s stake in its local subsidiary.
The CCP gave the green light to Coca-Cola Icecek’s move to buy 49.67% of Coca-Cola's Pakistan branch for $300m. The bottler had owned 49.7% of the business since 2008.
