• Reuters

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Ajinomoto and PepsiCo. are among bidders seeking to buy a stake in African dairy and beverage company Promasidor in a deal that would give them access to its distribution network across the continent, sources said.

A deal could value Promasidor at roughly $1 billion, according to the sources. The interest from the Japanese food maker and U.S. beverage giant shows how multinationals based in mature markets are looking abroad for growth and betting that Africa’s expanding middle classes will buy more packaged food and drinks.

The deal could be announced as soon as this week, according to several sources familiar with the matter, who declined to be named as the talks are confidential.

A third bidder is involved in the process, said two of the sources, but its identity was not immediately clear. Ajinomoto was seen as more likely to clinch a deal than PepsiCo.

One of the sources said the deal was for a third of South Africa-based Promasidor, which sells Cowbell milk, Top Tea and Yumvita infant cereal. That would mean an investment of more than $300 million, based on valuations in the sector and Promasidor’s estimated earnings before interest, tax, depreciation and amortization (EBITDA) of about $100 million.

The owners of Promasidor are looking for an investment from an industry player that will benefit from selling its own products through Promasidor’s distribution network in more than 30 African countries, the sources said.

Ajinomoto, which sells MSG and other seasonings as well as frozen foods, has been vocal about its international ambitions, as its home market is suffering due to the aging population and faltering economy. Its president said last year that it could spend up to $1.7 billion by the end of 2016 on deals to help it become a top 10 global food maker.

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