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PepsiCo to buy bottlers in deals totaling $7.8 billion

August 10, 2009
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The Associated Press reports that PepsiCo Inc. is buying its two top bottlers for $7.8 billion in a bid to save money and get new products to market more quickly. The deals were sealed months after PepsiCo''s first offers were rejected. The company spun off its bottler a decade ago so it could concentrate more on the then-booming soft drink business. But in the years since, consumers have gravitated toward healthier options like juices and teas, leaving soft drink sales to slump. That''s why the maker of Gatorade and Pepsi wants to own Pepsi Bottling again, and along with it, PepsiAmericas. The world''s second-biggest drink maker said the deals will allow it to respond more quickly to the changing market, because consumers tastes are changing so fast. Controlling the bottlers means it can do that effectively, and it also means it can better control costs and more tightly manage its business. PepsiCo believes that owning the bottlers will help it save about $300 million a year by 2012, up from original estimates of $200 million, which analysts had said was too low. The deals will allow PepsiCo to directly manage 80 percent of its drinks distribution in North America. The deals are subject to regulatory approval.
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