PepsiCo has agreed to acquire South African food and beverage manufacturer Pioneer Foods Group for approximately US$1.7 billion. This will be PepsiCo’s biggest deal outside of the US to date.

The US-based drinks and snack giant said that Pioneer’s product portfolio was complementary to its own, with strong positions in cereals, juices and other African nutritional food staples and the acquisition would enable PepsiCo to expand in sub-Saharan Africa by adding manufacturing and distribution capabilities.

“As we look to accelerate our growth in key markets around the world and achieve our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose, we are absolutely thrilled to join forces with Pioneer Foods, one of South Africa’s leading food and beverage companies,” said PepsiCo’s chief executive Ramon Laguarta.

“Pioneer Foods represents a differentiated opportunity for PepsiCo and allows us to immediately scale our business in Africa. Pioneer Foods forms an important part of our strategy to not only expand in South Africa, but further into sub-Saharan Africa as well. Our businesses are highly complementary, and we look forward to working with the Pioneer Foods team to successfully build and implement a shared vision in the region.”

As part of the transaction, PepsiCo plans to create a new operating sector within its business for Sub-Saharan Africa (SSA). PepsiCo SSA will be led by Eugene Willemsen, who has been with PepsiCo for nearly 25 years and most recently served as executive vice president of global categories and franchise management.

The acquisition will be funded through a combination of debt and cash and is to close by the first quarter of 2020.