Japanese firm Ajinomoto and PepsiCo are among companies vying for a stake in African dairy and drinks company Promasidor.

The deal which could put a price of $1bn on Promasidor will give the buyer access to the firm’s distribution network across Africa.

According to sources, a deal could be announced as early as this week. It is also said there is third bidder whose identity was not immediately known. However, Ajinomoto was seen as the clear front runner, ahead of PepsiCo and others.

One of the sources said the deal was for a third of South Africa-based Promasidor, which manufactures and sells Cowbell milk, Top Tea and Yumvita Instant cereals, among others. The investment would translate to roughly $300m based on valuations in the sector and Promasidor’s estimated earnings before interest, tax, depreciation and amortization (EBITDA) of $100m.

The owners of Promasidor are looking for an industry player who will benefit from distributing its own products through the company’s established networks in more than 30 African countries, the sources said.

Ajinomoto which sells MSG and other seasonings as well as frozen foods has been looking to expand its footprint outside of Japan as its market shrinks due to an aging population and a weak economy.

Promasidor was founded in 1979 by Robert Rose, a British citizen, who began selling milk powder in small, affordable sachets in the Democratic Republic of Congo (DRC) and the company has since grown to include other products and spread to 30 African countries, with strong presence in West Africa and growing business in East and Southern Africa.

Investment fund Tana Africa Capital, owned by E. Oppenheimer & Son and Singapore’s Sovereign Wealth Fund Tamasek both hold minority stakes in the firm and are looking to exit, according to sources.

The deal is to sell 33% of Promasidor which consists of 25% stake held by Tana Africa Capital and the rest from some members of the founding Rose family who want to exit the business as well.

Promasidor is being advised by Nomura Securities, while Ajinomoto is being advised by Goldman Sachs and PepsiCo is being advised by UBS, according to sources.

There has been an uptick in investments in the African food and beverage industry in the past few years as multinationals look abroad for growth and see Africa’s expanding middle class as a good reason to invest on the continent. In January, Atlanta-based Coca-Cola bought a 40% stake in Nigeria’s juice and dairy leading firm, Chi Limited; Last year, Kellogg’s took a 50% stake in Nigeria’s food company MultiPro; And in 2012, French yoghurt company Danone bought a substantial stake in Danish dairy firm, Fan Milk; Not to be outdone, Danish dairy firm Arla Foods partnered with Tolaram Group in Nigeria to package and distribute its Dano milk brand; It also struck a partnership deal with a Senegalese company last year as it tries to expand its footprint and distribution network in West Africa.