The Competition and Markets Authority (CMA) of the UK has opened an investigation into PepsiCo’s acquisition of the South African Pioneer Foods Group.

It has intimated the two companies by sending notices.

The competition authority said that it will announce its decision on 26 March 2020. It has invited comments from all interested parties.

PepsiCo agreed to acquire all outstanding shares of South African food and beverage producer Pioneer Foods Group for a consideration of $1.7bn in July

It agreed to pay R110 for each Pioneer share. This represents a premium of 56% over the share price measured over the previous month.

PepsiCo said that the deal will allow them to “gain a solid beachhead for expansion into Sub-Saharan Africa by boosting the company’s manufacturing and go-to-market capabilities.”

The boards of directors of both companies unanimously approved the deal. They intend to fund it through a combination of debt and cash.

PepsiCo also agreed to create a new operating sector for Sub-Saharan Africa (SSA).

In December, PepsiCo signed an agreement to acquire the US-based PopCorners snacks manufacturer BFY Brands.

Established in 1998 in the US, BFY Brands produces snacks in the better-for-you market. This addresses consumer trends toward healthier living and eating.

It is also a contract manufacturer of better-for-you popped snacks. It operates two manufacturing facilities in Middletown and Liberty in New York state.