8-KOther Events

PEPSICO INC 8-K Report (Aug 8, 2001)

Filed August 8, 2001For Securities:PEP

Summary

This 8-K filing from PepsiCo, Inc. (PEP) on August 8, 2001, announces the completion of its merger with The Quaker Oats Company, which officially closed on August 2, 2001. Under the terms of the merger agreement, Quaker shareholders received 2.3 shares of PepsiCo common stock for each share of Quaker common stock, plus cash for fractional shares. PepsiCo issued approximately 306 million shares of its common stock to complete this acquisition. The company has classified this transaction as tax-free and accounted for it using the pooling-of-interests method, a significant accounting treatment at the time. This strategic move integrates Quaker Oats into PepsiCo's operations, significantly expanding its portfolio, particularly in the ready-to-eat cereal and sports drink markets (Gatorade). Investors should note that supplemental pro forma financial information, unaudited, is available as an exhibit (Exhibit 99.1) to this filing, providing insight into the combined entity's potential financial standing. Detailed financial statements and pro forma information will be filed subsequently within the allowed timeframe.

Key Highlights

  • 1PepsiCo, Inc. completed the acquisition of The Quaker Oats Company on August 2, 2001, making Quaker a wholly-owned subsidiary.
  • 2Quaker shareholders received 2.3 shares of PepsiCo common stock per Quaker share, plus cash for fractional shares.
  • 3Approximately 306 million shares of PepsiCo common stock were issued to acquire Quaker Oats.
  • 4The transaction was treated as a tax-free merger.
  • 5The acquisition was accounted for using the pooling-of-interests method.
  • 6Unaudited supplemental pro forma financial information is provided as Exhibit 99.1.
  • 7More detailed financial statements and pro forma information will be filed later.

Frequently Asked Questions

The merger signifies a major strategic expansion for PepsiCo, integrating Quaker Oats' strong brands, particularly Gatorade and its ready-to-eat cereal business, into PepsiCo's global portfolio. This acquisition aimed to strengthen PepsiCo's position in key consumer product categories.

PepsiCo accounted for the acquisition of Quaker Oats as a tax-free transaction and utilized the pooling-of-interests method of accounting. This method combines the financial statements of the two companies as if they had always been merged, without recognizing goodwill generated by the acquisition.

This 8-K filing indicates that unaudited supplemental pro forma financial information (Exhibit 99.1) is available. However, the full, audited financial statements and more comprehensive pro forma information required under Regulation S-X will be filed separately within the allowed timeframe, providing a more detailed view of the combined entity's financial position and performance.

This number represents the total shares of PepsiCo's common stock that were exchanged for all the outstanding shares of Quaker Oats' common stock. It indicates a significant dilution for existing PepsiCo shareholders, but it was the mechanism used to finance the acquisition under the agreed-upon terms.