PepsiCo (PEP) has agreed a $1.7bn deal to acquire Pioneer Foods Group as it targets expansion in Africa.

The US soft drinks giant offered 110 rand ($7.94) per Pioneer Foods share, representing a 56% premium to the Johannesburg-listed company’s average share price.

Pioneer Foods shares jumped over 28% on Friday morning, trading at 997 rand.

Pioneer Foods’s portfolio – featuring brands such Fruit Bowl maker Stream Foods, Weet-Bix and Liqui-Fruit – “complements PepsiCo’s current lineup”, the company said, bringing together two “likeminded” businesses.

“This acquisition will help PepsiCo gain a solid beachhead for expansion into Sub-Saharan Africa by boosting the company’s manufacturing and go-to-market capabilities, enabling scale and distribution,” PepsiCo said.

PepsiCo chairman and CEO Ramon Laguarta said the acquisition would allow the company to “immediately” scale its business in Africa.

The deal – which has been unanimously approved by the boards of both parties - will be funded by a combination of debt and cash.

It is expected to complete by the first quarter of 2020 as it requires Pioneer shareholders’ and regulatory approval to proceed.