Pepsi, Coca-Cola competing for investment in Chobani

The Greek yogurt maker is hoping for a valuation of $3 billion

PepsiCo Inc and Coca-Cola Co are in talks to invest in Chobani LLC, in a deal that the Greek yogurt maker hopes could value it at as much $3 billion, including debt, according to people familiar with the matter.

The negotiations illustrate how soft drink giants are making a push to diversify beyond the slow-growth carbonated beverage sector into the US consumer market's faster-growing healthy lifestyle segment.

Chobani is exploring selling a minority stake, including warrants owned by private equity firm TPG Capital LP that account for between 10% and 20% of the yogurt maker's equity depending on its financial performance, the people said.

Chobani is looking for a strategic investor to help expand its supply chain, distribution, manufacturing base and geographic footprint for its popular yogurts like Flip, which combine yogurt with flavours such as peanut butter and coffee, the people added.

The deal under negotiation could change and there is no certainty that either Pepsi or Coca-Cola will reach an agreement, the people said. Other companies are also in talks with Chobani about a potential investment, the people said.