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PepsiCo responds to Pepsi Bottling Group on proposed bottler transaction

June 03, 2009
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PepsiCo issued the following statement in response to an announcement by Pepsi Bottling Group:

After careful review and analysis, PepsiCo remains convinced that there are annual synergies of at least $200 million through the consolidation of the two anchor bottlers and PepsiCo. PepsiCo believes there is no justification for the estimates that PBG released today of purported annual synergies of $750 million to $850 million. By way of comparison, PBG previously communicated to PepsiCo that a combination of PBG and PepsiAmericas would generate synergies well below $100 million. PepsiCo made its proposal to acquire its two anchor bottlers because of the need to strategically reshape the business and improve the system''s competitiveness and growth prospects. Critical to that is the need for PepsiCo and its anchor bottlers to continually reinvest to stimulate top-line growth and drive long-term value to customers, consumers and shareholders. PepsiCo has offered a full and fair price for the shares of PBG it does not currently own. Despite PBG''s stock price rising 45% in the 30 trading days prior to PepsiCo''s offer, PepsiCo offered an additional 17% premium to PBG''s shareholders. The offer price was a 69% premium to PBG''s stock price as of 30 trading days prior to the offer, which is well in excess of average premiums for comparable transactions. PepsiCo has a track record of being a disciplined buyer and will maintain that disciplined approach in this transaction. If in the future PepsiCo remains a stockholder in a public PBG, PepsiCo intends to maintain a disciplined stance with regard to the commercial arrangements between PBG and PepsiCo.

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