DOW JONES NEWSWIRES 
 

PepsiAmericas Inc. (PAS) said Monday it has formed a joint venture with Guatemala's bottling company Central America Beverage Corp., or Cabcorp, to combine their businesses in Central America and the Caribbean.

Financial terms weren't disclosed.

Under the deal, Cabcorp will control 82% of the combined company, while PepsiAmericas will have the remaining 18%, the company said in a press release.

In addition to the PepsiCo brands, the joint venture will produce and sell an expanded product portfolio in the region.

"The combination of our Caribbean business with Cabcorp provides the best strategic alternative to create value from this region," PepsiAmericas Chairman and Chief Executive Robert C. Pohlad said in the release. "In addition to leveraging scale and expertise, we believe the formation of this joint venture will allow us to participate in the higher growth Latin American markets where Cabcorp currently operates."

The joint venture will include Cabcorp's operations in Guatemala, Honduras, El Salvador and Nicaragua. PepsiAmericas' business in the Bahamas will not be part of the deal.

PepsiAmericas expects this transaction, which is expected to close in the third quarter, will not materially impact its 2009 adjusted earnings per share outlook.

The boards of both companies approved the terms of the joint venture.

The move comes less than two weeks after PepsiAmericas rejected PepsiCo Inc.'s (PEP) offer to buy the rest of the company it doesn't already own, calling it unacceptable. Pepsi made the nearly $1.7 billion cash-and-stock offer for the remaining 57% of PepsiAmericas last month.

Cabcorp, founded in 1885, is the 12th largest company in Central America with sales of $480 million in 2008, according to the release. It has been distributing, manufacturing and selling Pepsi-Cola products since 1942.

PepsiAmericas is the world's second-largest manufacturer, seller and distributor of PepsiCo beverages.

PepsiAmericas shares recently traded 2 cents lower at $25.42.

-By Dick Streuly, Dow Jones Newswires; 201-938-2170; dick.streuly@dowjones.com