April 29, 2011 / 7:07 AM / in 8 years

UPDATE 1-Thai bottler shareholders vote to end PepsiCo deal

* 99.41 pct of shareholders vote to end business with PepsiCo

* Serm Suk revenue to drop 70 pct after business ends

* Stocks down 1.67 pct, underperform market (Adds details, share price)

By Saranya Suksomkij and Ploy Ten Kate

BANGKOK, April 29 (Reuters) - Shareholders in PepsiCo Inc’s Thai bottler, Serm Suk Pcl , voted on Friday to terminate its contracts with the U.S. soft drink maker after more than half a century in business together.

The move means the U.S. giant will have to find other partners to tap growth in the Southeast Asian country of 67 million people. It had no immediate comment.

The decision comes almost a year after PepsiCo Inc failed in a bid to take over the bottler.

The two have been locked in a dispute over Serm Suk’s proposed new formula to calculate the price of concentrates that would cut prices by 9 percent from the previous contract. PepsiCo had sought a 5 percent price cut.

About 99.41 percent of shareholders voted to end the business with PepsiCo.

PepsiCo, maker of Pepsi-Cola, Sierra Mist and Tropicana juice, owns 41.54 percent of Serm Suk through Pepsi-Cola (Thai)Trading and Seven-Up Nederland BV. It remains unclear what it will do with this stake.

Serm Suk is valued at $400 million on the Thai bourse, so the stake is valued at about $160 million.

SBK Beverage, a unit of Japan’s Suntory Beverage & Food , owns 9.13 percent but it had no voting rights after retail shareholders filed a petition to a Thai court alleging it was a nominee of PepsiCo. The company denied the accusation.

PepsiCo and Suntory are partners in other markets and Serm Suk minority shareholders had urged Thailand’s Securities and Exchange Commission to investigate whether they had been trying to take control of Serm Suk after the failed bid last year.

After the termination, Serm Suk will cease bottling and distributing PepsiCo beverage products in the Thai market within 12 months.

Serm Suk is expected to see its revenue drop by 70 percent after the deal is ended, a financial adviser said. No details of its future business plan were offered at the shareholders’ meeting.

At the midsession break, Serm Suk shares were down 1.7 percent at 44.25 baht, after hitting their lowest since Jan. 24 of 44 baht at one point. The broader market was 0.6 percent lower.

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