Chobani, the Greek-yogurt maker founded by billionaire Hamdi Ulukaya, has rejected an offer from PepsiCo Inc. to take a major stake in the company.
Chobani hired Goldman Sachs Group Inc. last year to seek a strategic partner that would invest in the company and help it expand distribution and production. A recent offer from PepsiCo to invest in the company was shot down, effectively ending deal discussions, according to Michael Gonda, a spokesman for the Norwich, New York-based yogurt company. PepsiCo declined to comment.
The main issue was how much of a stake PepsiCo would acquire: Chobani wanted to sell a minority stake, while PepsiCo wanted the majority of the company, according to a person familiar with the negotiations, who asked not to be identified because the discussions were private.
When Chobani enlisted Goldman Sachs, the company was trying to get back on track following struggles stemming from a rapid expansion, which included a massive yogurt plant in Idaho. Chobani, whose sales grew to $1 billion over its first five years on the market, lost $115 million in the second half of 2013 as it struggled to ramp up production. Those issues have since been smoothed over, and the company plans to self-fund an expansion of its popular Flip line of yogurt and a move into the Mexican market.
PepsiCo, which owns brands such as Quaker and Frito-Lay, ended a previous foray into the yogurt business in December. The Purchase, New York-based company announced it was closing its western New York yogurt plant, a joint venture with Germany’s Muller. The plant had opened in 2013.
“In the crowded U.S. yogurt market, PepsiCo needed an established yogurt player as a partner,” Pablo Zuanic, an analyst at Susquehanna International Group, said in a report in December.
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