Analysis - Coca-Cola Co, PepsiCo should target sell-offs
Could Coca-Cola Co and PepsiCo target divestments in 2014?
In a note to clients late last week, Bernstein Research recommended that both soft drinks companies sell off their North American bottlers in the coming years. Such a move was described by the analyst as "likely... as long as pricing is not competitive and CSD volumes don't decline faster".
As well as its bottlers in North America, Coca-Cola may still sell its German bottler to Coca-Cola Enterprises, Bernstein suggested, although CCE has not yet taken up its option to buy the division.
PepsiCo, meanwhile, would benefit from a split of its global snacks operations, as the unit provides "faster growth" and is a "better business than beverages".
"We believe that more focused management, execution, and capital allocation generally could generate additional value for investors longer-term," said Bernstein of Coca-Cola and PepsiCo, as well as several US household & personal product companies. "Additionally, strategic buyers that can extract more value from divestments (ie, through greater synergies, local scale, and expertise) may be able to pay premium valuations and enhance the overall benefit to shareholders."
Since 2008, the analyst said, Coca-Cola has made 28 acquisitions and 16 divestments, the most notable being its stake in Mexico's Grupo Continental for US$2.3bn in 2011. PepsiCo, meanwhile has made 21 purchases and 16 sales in the last five years, with China Bottlers (Hong Kong) Ltd to Tingyi last year generating $600m.
Soft Drinks - BRIC (Brazil, Russia, India, China) Industry Guide
The BRIC Soft Drinks industry profile provides top-line qualitative and quantitative summary information including: market share, retail market size (value and volume 2007-11, and forecast to 2016). T...read more
Coca-Cola Enterprises Ltd is focused on strengthening consumer awareness of its sustainable recycling efforts, as well as its product choice, in the forecast period. The company has invested heavily i...
In this month's look at sustainability issues in the drinks industry, Ben Cooper argues that, however much has been done in the past in this arena. there is always more that can - and should - be done...
Synopsis Canadean's "PepsiCo, Inc. : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contai...
The Coca-Cola Co (TCCC) is the leading player in both soft drinks and in HW soft drinks. The company’s strength is based on its diversity of category presence from HW carbonates to RTD tea and bottled...
Coca-Cola Enterprises, Inc. (CCE) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compi...
- Allegro: The shape of things to come at Pernod?
- Pernod Ricard's Allegro cost-saving programme
- The End of the Road for International Beer Brands?
- Comment - Diageo's Distill Ventures: One Year On
- Pernod Ricard's FY Performance by Region, Brand
- Pernod Ricard set for CMO switch
- ASA bans Jägermeister TV ad
- Pernod bemoans tough FY as sales, profits drop
- Wine Australia reports death of UK, Europe boss
- Diageo takes Haig Club to Singapore airport