Pepsi is buying Chinese online snacks company Be & Cheery

PepsiCo Inc. plans to buy online snacks company Hangzhou Haomusi Food Co. — known as Be & Cheery — for $705 million from Haoxiangni Health Food Co. as the maker of Doritos and Lay’s potato chips expands in China.

Be & Cheery’s products includes nuts, dried fruits, meat snacks, baked goods and confectionery items that are sold mainly online through China’s major e-commerce platforms. The deal is subject to a Haoxiangni shareholder vote, certain regulatory approvals and other customary conditions, the companies said in a statement.

Pepsi is trying to expand in the Asian nation, where it saw “double-digit” revenue growth last year, as it contends with a general decline in the consumption of sugary soft drinks worldwide. Pepsi on Feb. 13 reported a 2020 earnings forecast that fell short of analysts’ estimates.

The snack and soft-drinks maker had been working on the Be & Cheery acquisition since before the coronavirus outbreak that began in China, and reaching the deal shows a willingness to make a long-term play even against uncertain near term. Pepsi closed one of its six manufacturing facilities in the country earlier this year to help deal with the outbreak. Earlier this month, Pepsi Chief Financial Officer Hugh F. Johnston said in an interview that the plant in Wuhan was expected to start up again shortly.

Pepsi’s last major acquisition came last year when it agreed to buy South Africa’s Pioneer Foods Group Ltd. for about 24.4 billion rand ($1.6 billion), adding local brands such as Weet-Bix breakfast cereal and Ceres fruit juice to expand across the continent. Before that, Pepsi agreed to purchase fizzy-drinks dispenser SodaStream International Ltd. for $3.2 billion in 2018.