American multinational food and beverage company, PepsiCo, has signed a ground-breaking worker empowerment deal following the acquisition of South African food company Pioneer Foods.
According to a statement by the Department of Trade and Industry (the dti), minister Ebrahim Patel said that the deal would help boost the country’s economic outlook at a time when business confidence was dwindling.
“This deal represents a new benchmark in empowering workers with a share-ownership plan as a result of merger conditions and committing a foreign investor to new job-creation. It is a shot-in-the-arm for business confidence at a low point in the economic cycle and can help to give traction to the economy,” Patel said.
As part of the deal, all PepsiCo employees will be allocated shares worth up to R1.6 billion which will be used to finance a 13% share in the local subsidiary, as well as have the power to elect at least one board member.
Additionally, PepsiCo has promised to invest R6.5 billion towards operations in South Africa with a view to creating 3 000 direct and indirect new jobs.
As one of the world’s largest snack and beverage companies, PepsiCo will now be tasked with overseeing operations at Pioneer Foods, which produces a host of well-known South African brands including Sasko bread, Spekko rice, Imbo beans and Ceres Juices. – Bjorn Vorster
