The FINANCIAL -- Sources said on March 18 that Coca-cola Co is trying to buy a majority stake in a Russian fruit juice maker Nidan Soki to step up its challenge PepsiCo Inc. in the country.

Coke has applied to the Russian antimonopoly agency to buy a 75% stake in juice company Nidan Soki from private equity group Lion Capital, according to The Wall Street Journal. The deal is likely to close in the late third quarter or early fourth quarter, according to one person familiar with the matter.

The same source reports that PepsiCo and its largest bottler agreed to buy 76% of OAO Lebedyansky, Russia's largest juice producer, for about $1.4 billion in 2008.

In January, sources familiar with the deal said Coca-cola was considering buying a controlling stake in Nidan from private equity group Lion Capital, according to Reuters. If successful, the deal would push Coca-cola to number one in the Russian juice market, leapfrogging PepsiCo.

Coca-Cola already has a significant stake in the Russian juice market through Multon, which has a nearly 22 percent market share, according to research group Business Analitika, the same source reports. "All the necessary agreements have been reached. It remains to get approval from FAS (Federal Anti-monopoly Service)," a source close to the U.S. beverage giant told Reuters.

A Coca-cola spokesman said Coke at this time isn't disclosing how much it will pay since discussions are still ongoing, according to the Wall Street Journal. News that Coke was applying to the antimonopoly agency was reported earlier by the Kommersant daily publication in Russia.

Coca-Cola is vying with PepsiCo Inc. to expand in a market that Euromonitor International estimates was worth $3.2 billion last year. PepsiCo Inc. is Russia’s largest juice producer with a 30 percent market share, according to Euromonitor, followed by Coca-cola Hellenic Bottling with 20.5 percent, according to Blomberg.  Nidan’s market share is 14.5 percent, the research company says.

Moscow-based Nidan, the maker of Moya Semya and Ya juices, may be valued at between $560 million and $620 million, based on estimated 2009 sales of $280 million and earnings before interest, depreciation and amortization of $60 million, said Tatyana Bobrovskaya, an analyst at BCS Financial Group, the same source reports. Nidan would benefit Coca-cola because the Russian company focuses on the so-called economic juice segment, which showed an increase in consumption last year, while overall juice consumption fell 15 percent in Russia, Bobrovskaya said, citing the data from researcher Business Analytica.

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