Government is believed to have given the go ahead to cola giant Pepsico to acquire one of its franchisees by bringing overseas funds while making it mandatory on the soft-drink conglomerate to divest 49 per cent equity in the same within five years.
Pepsico India Holdings, with an approved foreign equity of $405 million, had approached Foreign Investment Promotion Board to acquire operations of Dhillon Kool Drinks & Beverages through its subsidiary Aradhana Soft Drink Company on the ground the franchisee was facing 'enormous financial crisis'.
FIPB is understood to have cleared the proposal late last month and sent the same for approval of the commerce and industry minister.
Sources said that clearance is subject to the condition that the acquisition should be funded through foreign direct investment and not through domestic debt and that 49 per cent of the equity be divested in it within five years.
Pepsico's current total direct and indirect equity holding in Dhillon Kool drinks is 26 per cent which will be raised to 100 per cent.