PepsiCo has made a deal to buy its two largest bottlers, Pepsi MarketWatch, the deal constitutes a strained reunion — Pepsi Bottling was spun off from PepsiCo in 1999 via an initial public offering – that featured the rejection of a previous bid, lawsuits and the adoption of a “poison pill.” PepsiCo will pay Pepsi Bottling shareholders $36.50 a share either in cash or stock while PepsiAmericas shareholders will get $28.50 a share. The prices were above the previous offers of $29.50 and $23.27 a share each the company had made in April to its two largest bottlers that were turned down. The acquisition is expected to save the combined entity about $300 million by 2012 as supply chains are integrated, along with other cost efficiencies. And it is expected to add to PepsiCo’s profit by 15 cents a share by that same year. It also will allow Purchase, New York-based PepsiCo to directly manage about 80 percent of its total North American beverage volume distribution, including both its direct-store-delivery and warehouse systems. PepsiCo said it will be able to bring new products and packaging to market faster and bundle its food and beverage offerings to retailers to better compete against larger rival Coca-Cola.
PepsiCo Buys Bottlers for $7.8B
Will buy Pepsi Bottling Group and PepsiAmericas in a bid to compete with CocaCola.
August 5, 2009