Parent of Fort Wayne Pepsi Bottler Subject of Buy-out Offer from Pepsi

PepsiCo has launched what it terms a friendly offer to buy its two largest bottlers - PepsiAmericas and Pepsi Bottling Group.

PepsiAmericas is the second largest Pepsi bottler worldwide.  It is the parent of the Fort Wayne Pepsi bottler on North Harrison just north of the St. Marys River.  The Fort Wayne bottler was established originally as Wm. Scheele & Sons.

The Wall Street Journal's Betsy McKay, Dennis Berman and Valerie Bauerlein write today:

A decade ago, Pepsi sought to separate itself from its bottlers, figuring it would help the company focus on soft-drink growth while keeping bottling assets off its balance sheet. In an interview, Pepsi Chairman and Chief Executive Indra Nooyi said business conditions had changed significantly since then. Consumers are abandoning soft drinks for water, juice and other noncarbonated beverages.

Owning the two big bottlers would give Pepsi control over how it distributes its beverages, allowing it to revamp production and distribution and squeeze out costs. "We can accelerate revenue growth and be more agile and flexible," she said of the offer. "When you have a flat-to-shrinking profit pool, slicing it 20 ways to Sunday is not the answer."

Combining Pepsi with its two main bottlers would give Pepsi control of about 80% of its North America beverage distribution volume. The company also said it expects to save $200 million through synergies, and expects to boost annual earnings by 15 cents a share once those synergies are fully realized.

Comments

[Andrew McNair]

Will this lead to the bottler cleaning up the Pepsi machine graveyard on Wells street?

[Andy Borgmann]

Huh. I never knew there was a Pepsi bottler in Fort Wayne. I knew there was that Coke place by the airport (which I think is a bottler, but might just be distribution).

I have always been a Pepsi guy (even now living in Atlanta).

[John Wonderly]

Actually, Wm. Scheele & Sons. was a legendary Fort Wayne outfit such as a couple that have bitten the dust recently, Zollner Piston and Koehlinger Cycling & Fitness formerly owned by the Fort Wayne legend Uncle Win.

[Mark Andrews]

OMG!! Combined synergies!! Why don't corporate talking heads speak English!! When are they going to utsource Senior Management to make these cruical investment stratgies