EU Clears PepsiCo To Buy Pepsi Bottling Group
October 27 2009 - 5:30AM
Dow Jones News
The European Commission Tuesday cleared PepsiCo Inc. (PEP) to
buy Pepsi Bottling Group Inc. (PBG).
The Pepsi Bottling Group, bottles mostly PepsiCo drinks with
operations in the U.S., Mexico, Canada, Spain, Russia, Greece and
Turkey.
PepsiCo is paying $36.50 per share in cash and stock for Pepsi
Bottling. Before its bid, PepsiCo owned a 33% stake in Pepsi
Bottling.
The deal together with another bottling company acquisition will
allow PepsiCo to control 80% of its North American beverage
distribution, a move the company has said will allow it to cut
costs as the region's soda sales have been stagnating.
PepsiCo's move reverses the steps the company took a decade ago
to separate its bottling operations.
Bottlers, which are heavy users of commodities like aluminum and
are responsible for transporting the drinks, tend to have much
narrower margins than Coke and Pepsi, which sell the soft drink
concentrate and market the brands.
-By Peppi Kiviniemi, Dow Jones Newswires; +3227411483;
peppi.kiviniemi@dowjones.com
(Anjali Cordeiro in New York contributed to this article.)