PEP PepsiCo Inc

By Annie Gasparro and Mike Esterl 

Chobani Inc. said it rejected an offer from PepsiCo Inc. to buy a majority stake in the company.

The U.S. yogurt maker hired Goldman Sachs last summer to seek a partnership with a major food company.

Chobani said Friday that the soda and snacks giant expressed interest but was looking for a majority stake. Chobani said it was only interested in selling a minority stake.

PepsiCo declined to comment Friday.

Chobani Founder and Chief Executive Hamdi Ulukaya presented his strategy to multiple companies, hoping a partnership would help propel Chobani into other product categories like dips and expand to other countries.

The company now plans to pursue those opportunities on its own, a Chobani executive told The Wall Street Journal on Friday.

"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 said.

PepsiCo had already been in the yogurt business through a U.S. joint venture with Germany's Theo Müller Group. It ended that venture in December because of weak sales.

PepsiCo declined at the time to comment on any plans to re-enter the U.S. yogurt market but said it remained committed to growing its nutrition business, including the dairy category.

Chobani has built a roughly $1.5 billion yogurt brand in just eight years, giving it nearly 20% of all U.S. yogurt sales, according to market research firm Nielsen.

The company, still majority owned by Mr. Ulukaya, ran into some growing pains in 2013 as it rapidly expanded across the country and opened a new yogurt plant.

Chobani's business rebounded last year, benefiting from the help of private-equity investors who cut costs and from a successful new yogurt with granola and other mix-ins called Chobani Flip.

Müller Quaker Dairy LLC began selling products in the U.S. in 2012 and opened a $200 million plant in 2013 to take aim at the fast-growing U.S. yogurt market. The move also fit with PepsiCo's strategy of expanding into more "good for you" products.

But PepsiCo and Müller struggled to take market share from established yogurt brands including Chobani, General Mills Inc.'s Yoplait and Dannon, owned by France's Danone SA.

Write to Annie Gasparro at annie.gasparro@wsj.com and Mike Esterl at mike.esterl@wsj.com

(END) Dow Jones Newswires

February 05, 2016 21:22 ET (02:22 GMT)

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