Suntory Holdings Limited has announced that it will acquire a 51 percent stake in PepsiCo's Vietnam beverage business, while PepsiCo will be a 49 percent shareholder.

It is a part of a recent agreement between the two parties to form a strategic alliance which is expected to build on PepsiCo's existing position in Vietnam and create new growth opportunities for PepsiCo and Suntory in the market.

The alliance is designed to combine the capabilities of both companies in ways that are mutually beneficial to their businesses, customers and consumers. Suntory and PepsiCo will hold key roles in the management team of the new joint venture, which will serve as the bottler for both companies in Vietnam, they said.

PepsiCo, one of the leading players in Vietnam's liquid refreshment beverage sector, will retain marketing and innovation responsibilities for its portfolio of iconic beverage brands in Vietnam, which include Pepsi-Cola, 7-UP, Sting, Mirinda, Tropicana Twister, Lipton and Aquafina.

PepsiCo and Suntory have an established record of successfully working together in other beverage markets, including the United States, Japan and New Zealand.

Since entering the market in 1994, PepsiCo has undertaken an investment program of more than $500 million and now has five beverage manufacturing plants in Vietnam, a high priority market in PepsiCo's aggressive emerging and developing markets growth plans.

PepsiCo nearly tripled its business in emerging and developing markets, from $8 billion in annual revenue in 2006 to $22 billion in 2011.

Suntory has accelerated its global strategy and expanded its beverage business in Southeast Asia following the establishment of Suntory Beverage & Food Asia Pte. Ltd. in Singapore.

As a result, expansion into Vietnam is a key part of Suntory's long-range plans.

However, PepsiCo will continue to independently operate its foods business in Vietnam. 

“This alliance is one of our strategic initiatives to pursue further growth in the region. Suntory is committed to the Vietnam business together with PepsiCo, our partner of more than 30 years," said Henry Park, CEO of Suntory Beverage & Food Asia Pte Ltd, a wholly owned subsidiary of Suntory Holdings Limited.

"Vietnam is a highly attractive growth market where PepsiCo is well positioned in the food and beverage marketplace. We're focused on expanding our food and beverage business in Vietnam through continued investment across our portfolio,” said Umran Beba, President, PepsiCo Asia Pacific.

Suntory Group, which was founded in 1899, is a multi-national major beverage company with a broad range of business including wellness, food, restaurants and flowers with consolidated sales worth more than $23 billion in 2011. It has about 200 group companies, with 28,532 employees across Japan, the United States, Europe and Asia Pacific.

PepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales.