Pepsi offers to buy out its two bottlers for about $6 billion

20 April 2009

The world's second- largest soft-drink maker, Pepsi plans to offer to buy out its two largest independent bottlers for about $6 billion.

Pepsi says it will acquire all the outstanding shares of common stock it does not already own in its two largest anchor bottlers, The Pepsi Bottling Group (PBG ) and PepsiAmericas (PAS), for $29.50 and $23.27 per share respectively m - a premium of 17.1 per cent over the closing price of the common stock of each company on on 17 April.

Pepsi already owns 33.1 per cent of PBG stock and 43 per cent of PAS.

The offers consist of $14.75 in cash plus 0.283 shares of PepsiCo common stock for each share of PBG, and $11.64 in cash plus 0.223 shares of PepsiCo common stock for each share of PAS and the total value of the shares PepsiCo is proposing to acquire is approximately $6 billion.

Pepsi said in a press release, ''The acquisitions would create a leaner, more agile business model and provide a stronger foundation for PepsiCo's future growth. Pepsi would handle distribution of about 80 per cent of its total North American beverage volume, including both its direct-store-delivery and warehouse systems.''

Since the last decade, Pepsi has deliberately kept its distance from the bottling business to concentrate on marketing, sales and bringing out newer products.