US: Anheuser-Busch InBev, PepsiCo sign purchasing deal
The agreement allows both companies to purchase goods and services more efficiently and at competitive prices, the companies said yesterday (13 October).
The deal means they will be "effectively managing costs that can be reinvested back into areas that will grow their businesses", they said.
The deal will apply to goods and services not directly related to making the beverages they sell, such as information technology hardware, office supplies, travel and facilities services, transportation, and maintenance, repair and operating supplies.
A team of procurement experts for each company will focus on common areas of spending and negotiate purchases on behalf of both companies.
In the US, there are many similar goods and services that each company purchases, making the agreement a "good fit" for the specific needs of both companies for their US purchasing, the companies claimed.
Specific cost-savings will depend on the negotiated terms for each purchase.
Stifel Nicolaus analyst Mark Swartzberg believes the move may ultimately result in "additional cooperation" between the two companies.
"The move validates speculation that the companies have reason to cooperate beyond their existing relationship in Brazil (A-B InBev is Pepsi's largest independent soft drink bottler, assuming PepsiCo completes its planned acquisition of Pepsi Bottling Group)," Swartzberg said in a note today.
"We think it is also reasonable to imagine additional cooperation between the companies, ultimately," he said. "Areas that come to mind are joint purchasing of key commodities (e.g., aluminium) and sharing of distribution."
Earlier this month, Anheuser-Busch InBev completed the widely-expected sale of its entertainment business to private equity group Blackstone Capital Partners.
The UK soft drinks market grew by 2% in value in 2009, enough for sales in the on-trade to climb ahead of spirits to take the number two spot behind beer....
US soft drinks giant PepsiCo has said it is targeting growth in China following recent Government approval to build of 14 new beverage plants by the Chinese government....
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