PepsiCo Inc. (PEP) sees annual synergies of at least $200
million through the consolidation of its two anchor bottlers,
significantly under an estimate one of the companies made during a
Tuesday conference call.
PepsiCo, which has faced resistance in its effort to acquire
Pepsi Bottling Group Inc. (PBG) and No. 2 bottler PepsiAmericas
Inc. (PAS), said it saw "no justification" for Pepsi Bottling's
estimate of $750 million to $850 million. According to PepsiCo,
Pepsi Bottling previously had indicated it believed the figure was
well below $100 million.
The bottlers have maintained that the proposed deal with PepsiCo
undervalued potential synergies from a buyout, although specific
figures weren't made public before Tuesday.
PepsiCo said the proposed acquisitions would allow the company
to reshape its business and to improve its competitiveness. It
maintained that it has offered "a full and fair price" for the
shares of Pepsi Bottling it doesn't already own.
PepsiCo currently owns 33% of Pepsi Bottling and 43% of
PepsiAmericas.
The bottlers' refusals have been widely viewed as more of a
negotiating tactic than an outright balking at a deal.
Earlier Tuesday, Pepsi Bottling raised its second-quarter and
year earnings forecasts, citing improved results in the U.S. and
Canada, as well as easing commodities costs and foreign-exchange
volatility.
Pepsi's shares were up 4.3% at $55.40 in recent trading, while
Pepsi Bottling's shares had risen 3% to $34.20 and PepsiAmericas'
shares were up 2.2% at $26.92.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com
