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US: PepsiCo to form new bottling giant

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PepsiCo is to create a new soft drinks bottler named PepsiCo Bottling North America, following its US$7.8bn deal to take full control of, and merge, Pepsi Bottling Group and PepsiAmericas.

PepsiCo Bottling North America, which will begin operating once the merger is complete, will account for around three quarters of PepsiCo's North American bottling system, the soft drinks giant said today (5 October).

Eric Foss, current CEO and chairman of Pepsi Bottling Group (PBG), will head the new bottling firm, reporting to PepsiCo CEO and chairperson Indra Nooyi.

"This structure will provide two very important benefits," Nooyi said. "It will allow us to continue the critically important work we began last year to refresh our core soft drink brands.

"At the same time, it will enable us to maintain the operating focus we need to capture the strategic opportunity created by our bottler mergers, particularly in North America."

PepsiCo said in August that it had agreed to pay $7.8bn to buy up all remaining shares in PBG and PepsiAmericas that it does not already own. It said it expected to close the deals by early 2010 at the latest.

The group said today that it will establish a special advisory board to enable a smooth transition to the new bottling set-up.

The board will consist of Foss, Nooyi and PepsiAmericas CEO and chair Robert Pohlad and the founding chairman and CEO of PBG, Craig Weatherup, who retired in 2003.

Current PBG and PepsiAmericas operations in Europe and Russia will be managed by PepsiCo Europe when the merger is completed.


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