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PepsiCo buys former RJR Nabisco divisions

PURCHASE, N.Y. -- PepsiCo Inc. said Monday it bought two leading snack foods in the United Kingdom from France's leading food and beverage company BSN Groupe for a total of $1.35 billion.

BSN, the world's second-largest biscuit producer and parent of the Dannon yogurt brand, acquired Walkers Crisp and Smiths Crisps June 6 from RJR Nabisco Inc. as part of a $2.5 billion package.

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Smiths and Walkers, with combined sales estimated at $460 million, are leading sellers of snack foods and crisps, or potato chips.

D. Wayne Calloway, chairman and chief executive of PepsiCo, said the companies have a position in the United Kingdom similar to that of Frito-Lay in the United States.

'This acquisition makes PepsiCo the largest snack food producer in Europe,' he added.

The purchase will dilute PepsiCo's 1989 earnings by approximately 8 cents per share, the company said.

PepsiCo, through PepsiCo Foods International, already has snack food businesses in a number of countries including Brazil, Mexico, Spain and Australia.

Snack foods accounted for 13 percent of the company's annual revenues of $13 billion last year.

The rest of its business came from soft drink businesses, Pepsi-Cola Co. and Seven-Up International, and restaurants such as Pizza Hut, Taco Bell and Kentucky Fried Chicken.

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BSN will keep the French and English biscuit divisions and the Italian pastry maker that also were part of its transaction with RJR Nabisco.

The U.S. food company unloaded the European divisions as part of its program to reduce corporate debt and satisfy government antitrust regulations after the $24.9 billion buyout by Kohlberg Kravis Roberts & Co. earlier this year.

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