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Issue Date: Vol. 50, No. 3, March 2010, Posted On: 3/4/2010

PepsiCo Completes Bottler Acquisitions

Emily Jed
Pepsi, PepsiCo, Pepsi Bottling Group Inc., PepsiAmericas Inc., Eric J. Foss, vending, vending machine, vending supplies, automatic merchandising, food service

PURCHASE, NY -- PepsiCo announced said it has completed the $7.8 billion acquisitions of its two largest bottlers, Pepsi Bottling Group Inc. and PepsiAmericas Inc.

With the completion of the mergers, PepsiCo stakes its claim as the largest food and beverage business in North America and the second largest in the world, with nearly $60 billion in annual revenues and approximately 285,000 employees. It also is the global leader in savory snacks.

PepsiCo said 80% of its North American beverage manufacturing, sales and distribution system will be consolidated, enabling greater operating efficiencies and speed-to-market. The company added that ownership of the bottling operations would provide it with greater control over development, distribution and marketing of new products.

The transactions are expected to create pretax synergies of approximately $125 million to $150 million in 2010 and $400 million annually when fully implemented by 2012. The company said some of the cost savings would be reinvested in high-growth emerging markets, global research and development and new operating capabilities.

PepsiCo Americas Beverages (PAB) segment, which encompasses PepsiCo's beverage businesses across the Americas, will be comprised of two business units.

Eric J. Foss will lead the newly combined bottling operations, called Pepsi Beverages Co. and Massimo F. d'Amore will continue to lead Gatorade, Tropicana and Latin America Beverages as chief executive of PepsiCo Beverages Americas. He remains responsible for PAB marketing and franchise management. The operations of PBG and PepsiAmericas in Europe will be consolidated into PepsiCo Europe, led by Zein Abdalla.

PBG and PepsiAmericas common stock ceased trading on the New York Stock Exchange at the close of the market on Friday, Feb. 26, and have been de-listed. PepsiCo reiterated previous guidance that it expects to achieve 11% to 13% EPS growth in 2010 and low- double-digit EPS growth in 2011 and 2012

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