PepsiCo’s $1.2B Deal To Buy Tortilla-Chips Maker Siete Foods Gets Retail’s Stamp Of Approval

PepsiCo (PEP) said on Tuesday it will acquire Mexican-American food brand Siete Foods’ parent Garza Food Ventures for $1.2 billion.

The beverage-maker believes the acquisition will complement its portfolio while also growing its better-for-you food offerings.

Siete Foods was founded in 2014 and is known for its tortillas, salsas, seasonings, sauces, cookies, snacks among other food products. Siete's products can be found in grocery stores, club stores, and organic food retailers primarily across the U.S.

The transaction is expected to close in the first half of 2025.

Following the announcement, retail sentiment for PepsiCo inched-up into the ‘extremely bullish’ territory (78/100), accompanied by high message volumes.

PepsiCo stock has witnessed some price target revisions lately. JPMorgan recently raised its price target on PepsiCo to $185 from $182, while keeping a ‘Neutral’ rating on the stock. The brokerage reportedly believes PepsiCo’s setup ahead of its Q3 earnings report is challenging.

On the other hand, BofA Securities lowered its price target on the stock to $185 from $190, while keeping a ‘Buy’ rating. The brokerage has lowered its FY24 and FY25 estimates to reflect persistent weakness in North America snacks and beverages due to consumption trends at the category level and market share losses.

BofA noted that its FY24 and FY25 earnings per share forecasts currently stand at $8.00 and $8.45, respectively.

Shares of PepsiCo have lost over 1.75 on a year-to-date basis, grossly underperforming the benchmark indices.

Meanwhile, deals in the packaged foods industry appear to be picking up pace. In August, Snickers-maker Mars said it will acquire Pringles-maker Kellanova for $83.50 per share in cash, for a total consideration of $35.9 billion, including assumed net leverage.

Mars had said all of Kellanova’s brands, assets and operations, including its snacking brands, portfolio of international cereal and noodles, North American plant-based foods and frozen breakfast are included in the transaction.