As it acquires bottling giants Pepsi Bottling Group Inc. (NYSE:PBG) and PepsiAmericas Inc. (NYSE:PAS) for $7.8 billion, PepsiCo Inc. (NYSE:PEP) will create a new bottling group -- PepsiCo Bottling North America, or PBNA.
Eric Foss (pictured), chairman and CEO of PBG, the world's largest bottler of PepsiCo beverages, will become CEO of the new bottling unit, which will comprise all current PBG and PAS operations in the U.S., Canada and Mexico. Bill Pecoriello, a top-ranked
analyst at ConsumerEdge Research LLC, lauded Foss' appointment, saying in a research note, "Given the heavy lifting that will be required to integrate the three separate companies, realize cost and
revenue synergies, along with eventual route to market changes, a strong leader/executor is required. We can think of no executive better positioned for this
role than Eric Foss."
In a
press release, PepsiCo said PBNA will be separate from the brand-oriented PepsiCo Americas Beverages unit, which will continue to oversee independent bottlers and Gatorade and Tropicana operations. "The separation will allow greater focus for both units and enable PBNA to continue producing and distributing 'allied brands' not owned by PepsiCo."
Current PBG and PAS operations in Europe and Russia will be managed by PepsiCo Europe when the mergers are completed.
PepsiCo chairman and CEO Indra Nooyi said in a statement, "This new beverage model will strengthen our position in the global beverage marketplace through a powerful combination of scale, speed, flexibility and efficiency." The Purchase, N.Y., company also created a board to oversee integration of the bottlers, including Foss; Nooyi; Robert Pohlad, chairman and CEO of PepsiAmericas; and Craig Weatherup, the founding chairman and CEO of Pepsi Bottling Group who retired in 2003. Prior to his PBG tenure, Weatherup was CEO of Pepsi-Cola Co. and president of PepsiCo.
Foss is also a Pepsi-Cola alumnus. He joined the company in 1982 and worked in field and headquarters sales, marketing and general management positions in the U.S. and Europe.
Pecoriello noted that, beyond the integration, it will be
key for PepsiCo to then demonstrate the competitive
advantage of its newly integrated system -- for example, route to
market changes, revenue synergies with Frito,
leverage with retailers and new sales/operating models.
The mergers still require regulatory and shareholder approval. -
Baz HiralalGo to the announcement
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
