By Lisa Kerner
Charlotte, N.C., Aug. 4 - PepsiCo, Inc. said it entered into agreements to acquire the outstanding shares of common stock it does not already own of its two largest anchor bottlers, Pepsi Bottling Group, Inc. and PepsiAmericas, Inc.
One agreement gives Pepsi Bottling shareholders the right to elect to receive either $36.50 in cash or 0.6432 shares of PepsiCo common stock, valued at $36.50 based on PepsiCo's closing share price of $56.75 on July 31, for each share of Pepsi Bottling held, subject to proration.
Under the offer, 50% of the total consideration paid to Pepsi Bottling shareholders will be in cash and 50% will be paid in PepsiCo common stock, a PepsiCo news release said.
Under the second offer, PepsiAmericas shareholders will have the right to elect to receive either $28.50 in cash or 0.5022 shares of PepsiCo common stock, valued at $28.50 as of July 31, for each share of PepsiAmericas held.
The PepsiAmericas offer is subject to the same proration as the Pepsi Bottling offer.
According to PepsiCo, the total value of the shares it will be acquiring is about $7.8 billion.
The transactions are expected to close in late 2009 or early 2010, subject to shareholder and other approvals, according to PepsiCo.
PepsiCo, a Purchase, N.Y., food and beverage company, believes the transactions will create annual pre-tax synergies of $300 million by 2012 and be accretive to its earnings by about 15 cents per share when synergies are fully realized in 2012.
"The fully integrated beverage business will enable us to bring innovative products and packages to market faster, streamline our manufacturing and distribution systems and react more quickly to changes in the marketplace, much like we do with our food business," PepsiCo chairman and chief executive officer Indra Nooyi said in the release.
Prior offers rejected
Previously, Pepsi Bottling turned down PepsiCo's May 4 offer to acquire the company for $14.75 in cash plus 0.283 shares of PepsiCo common stock, for a total value of $29.50 per share.
PepsiAmericas rejected PepsiCo's offer to acquire it for $11.64 in cash plus 0.223 shares of PepsiCo common stock, or $23.27 per share.
Centerview Partners and Bank of America Merrill Lynch are lead financial advisers to PepsiCo. Citi is also advising the company.
Morgan Stanley is advising Pepsi Bottling, and Goldman Sachs is advising PepsiAmericas.
Pepsi Bottling, based in Somers, N.Y., is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages.
Minneapolis-based PepsiAmericas is the world's second-largest manufacturer, seller and distributor of PepsiCo beverages.
| Acquirer: | PepsiCo, Inc.
|
| Target: | Pepsi Bottling Group, Inc.
|
| Announcement date: | Aug. 4
|
| Price per share: | $36.50 cash or 0.6432 PepsiCo shares
|
| Expected closing: | Late 2009 or early 2010
|
| Stock price of acquirer: | NYSE: PEP: $56.20 on Aug. 3
|
| Stock price of target: | NYSE: PBG: $33.62 on Aug. 3
|
|
|
| Acquirer: | PepsiCo, Inc.
|
| Target: | PepsiAmericas, Inc.
|
| Announcement date: | Aug. 4
|
| Price per share: | $28.50 cash or 0.5022 PepsiCo shares
|
| Expected closing: | Late 2009 or early 2010
|
| Stock price of acquirer: | NYSE: PEP: $56.20 on Aug. 3
|
| Stock price of target: | NYSE: PAS: $26.15 on Aug. 3
|
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