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Mon 5 May 2014 01:42 PM

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PepsiCo chief backs Dubai Refreshments merger

Both companies are distributors of PepsiCo soft drinks and snacks in the region

PepsiCo chief backs Dubai Refreshments merger
PepsiCo MEA president Omar Farid.

The head of PepsiCo’s Middle East and Africa operations has backed a merger between franchisees Dubai Refreshments (DRC) and Abu Dhabi Refreshments Company.

In December DRC said it would open talks between the two companies about a possible merger in what it described in a statement to the Dubai bourse as “as an opportunity to create greater synergies for both the companies”.

Both companies are distributors of PepsiCo soft drinks and snacks in the region and though no values were given in the statement, DRC has a market capitalisation of around $300 million.

“This is great, consolidating and putting the two businesses together, that that’s something we support and we encourage 100 percent,” PepsiCo MEA president Omar Farid said in a wide-ranging interview published in Arabian Business.

“These are two independent bottlers, both of them have been doing business for the last 50 years – very strong market share, very strong volumes -  and putting them together is going to be creating lots of synergies and we play our role as the owners of the brands in making sure that they get together as close possible – blessing that partnership.”

Asked whether he believed the merger would eventuate he said: “I cannot really comment on that, but I will do everything I need to do to make sure, providing the support from myself and my team to make that happen.”

Sheikh Ahmed bin Rashed Al Maktoum, the brother of Dubai's ruler, is the largest shareholder in DRC with a 20 percent stake, with three other local families holding more than 5 percent, according to Thomson Reuters data.

Fifty-nine percent of DRC is publicly listed, although the stock is barely traded. Its shares were unchanged at 12.25 dirhams ($3.34) in Dubai, having last traded on December 12.

Abu Dhabi Refreshments Co is fully-owned by the Al Dahery Group, according to Zawya, a Thomson Reuters unit.

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