PepsiCo made a sweetened $36.50/share offer for bottler PBG after its previous bid of $29.50/share was rejected. The deal is expected to save the combined companies more than $300 million a year by 2012.
PBG raised both its 2Q2009 and annual earnings based on the trends of continued commodity price deflation and decreased volatility in foreign currencies for the improved outlook.
In a move to regain control of its bottling operations, PepsiCo accounced an offer to buyout shareholders of PBG, its largest bottler. Under terms of the offer, PBG shareholders will receive $14.75 in cash and .283 shares of PepsiCo per share of PBG.
Deutsche Bank upgraded PBG to "buy," citing renewed stregnth in the US soda market and increased marketing of its products by PepsiCo.
Pepsi Bottling Group reported a 2% increase in revenues to $3.8 billion in Q4 '09 vs q4 '08, but impairment charges caused quarterly earnings to be a loss of $271 million..
Pepsi Bottling reported better-than-expected third-quarter profit and boosted its full-year forecast after raising prices to counter slower sales. Volume in North America fell 6 percent on weak consumer demand, price increases, however, boosted global revenue per case by 9%.
Pepsi Bottling posted a 7.4% rise in Q2 net income amid solid revenue gains outside the U.S., but trimmed its sales outlook for the year due to weakness in its core North American market.
A report in the Beverage Digest newsletter stated that the Pepsi Bottling Group might be cutting jobs in order to streamline operations.
U.S. stocks, including PBG’s, traded much lower on news of widespread selloffs in the Chinese stock market. This day was termed “Grey Tuesday" by The Economist.