Yogurt maker Chobani has rejected an offer from PepsiCo to buy a stake in the company, saying it would fund new growth initiatives on its own.
Chobani hired Goldman Sachs last summer to seek a partnership with a major food company that would invest in the company and help expand production and distribution. PepsiCo, which has been seeking to grow its nutrition business, including the dairy category, recently made an offer.
But the terms of the deal did not work for Chobani, Bloomberg reported, citing a person familiar with the negotiations.
“The main issue was how much of a stake PepsiCo would acquire: Chobani wanted to sell a minority stake, while PepsiCo wanted the majority of the company,” Bloomberg said.
In October, Coca-Cola Co. ended talks to invest in Chobani, saying it was not the best fit for Coca-Cola’s portfolio.
Chobani, whose sales grew to $1 billion over its first five years on the market, lost $115 million in the second half of 2013 as it struggled to ramp up production. “Those issues have since been smoothed over, and the company plans to self-fund an expansion of its popular Flip line of yogurt and a move into the Mexican market,” according to Bloomberg.
“We took our time with this process, conducted thorough due diligence and in the end, given our strong performance, we decided to fund our new growth initiatives ourselves while keeping our independence, which is important to us,” Chobani spokesman Michael Gonda told the Wall Street Journal on Friday.
If and when the company does want to pursue a deal, Food Dive said, a better fit could be WhiteWave Foods. The Denver organic foods producer recently bought Wallaby yogurt and Vega Foods, which helped WhiteWave’s third-quarter revenue rise 15%, to $1 billion.
“Acquiring a stake in Chobani would be in line with WhiteWave’s recent acquisition targets and growth strategy, and such a deal could help Chobani expand production and distribution capabilities,” Food Dive said.