The world's second largest soft drinks maker, Pepsico, is extending its reach in the international snack foods market by buying for $750 million (€563m, £390m) the 40.5% stake held by General Mills in their joint operation, Snack Ventures Europe.

Founded in 1992, the business claims to be continental Europe's largest snack food company with annual sales of more than $1 billion. Products marketed include FritoLays, Bugles, Doritos, Ruffles and Dippas.

Pepsico, headquartered in New York state, will have under its sole control brands made and sold in Spain, Holland, France, Belgium, the Baltic States, Hungary and Russia. They will be marketed to retailers together with Pepsico drinks under a "power of one" initiative.

Minneapolis-based General Mills will use the proceeds from the sale, expected to be completed early 2005, to reduce its debt by $675m.

The deal is the latest move by Pepsico to expand its international snack business. Sales of snack foods now generate around 70% of the company's profits.

Ceo Steve Reinemund is also expanding distribution of FritoLay chips in India and China.

Says Erica Bisette of Kayne Anderson Investment Management: "It's exciting to see them step into the international arena because I think it's something they'll be successful at."

Data sourced from Wall Street Journal Online; additional content by WARC staff