8-KAcquisitions & DispositionsMaterial AgreementsFinancial Events+1

PEPSICO INC 8-K Report, Material Agreement (Mar 1, 2010)

Filed March 1, 2010For Securities:PEP

Summary

PepsiCo, Inc. (PEP) filed this Form 8-K on March 1, 2010, to report the completion of its previously announced acquisitions of The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS). The transactions involved PBG and PAS merging into PepsiCo's subsidiary, Pepsi-Cola Metropolitan Bottling Company, Inc. (Metro), with Metro as the surviving entity. This marks a significant step in PepsiCo's strategy to gain greater control over its bottling operations. As a result of these mergers, PepsiCo issued approximately 49.2 million shares of its common stock and paid approximately $2.8 billion in cash to former PBG stockholders. Additionally, it issued approximately 17.8 million shares and paid approximately $1.0 billion to former PAS stockholders. The company also assumed significant debt obligations from PBG and PAS through Metro, including credit facilities and various senior notes, totaling over $2.8 billion in newly assumed credit capacity and significant note obligations, which are guaranteed by PepsiCo.

Key Highlights

  • 1Completion of the acquisition of The Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) through mergers with PepsiCo's subsidiary, Metro.
  • 2PBG and PAS merged into Metro, with Metro continuing as the surviving wholly-owned subsidiary of PepsiCo.
  • 3Former PBG shareholders received a mix of PepsiCo stock (0.6432 shares or $36.50 cash per share) and cash, with a 50/50 split between stock and cash elections, totaling approximately 49.2 million shares and $2.8 billion in cash issued/paid by PepsiCo.
  • 4Former PAS shareholders received a mix of PepsiCo stock (0.5022 shares or $28.50 cash per share) and cash, with a 50/50 split between stock and cash elections, totaling approximately 17.8 million shares and $1.0 billion in cash issued/paid by PepsiCo.
  • 5PepsiCo's subsidiary Metro assumed significant credit facilities: up to $540 million under the Amended PAS Credit Agreement and up to $1,080 million under the Amended PBG Credit Agreement, both guaranteed by PepsiCo.
  • 6Metro assumed substantial note obligations from PBG, including approximately $1 billion of 7.00% Senior Notes due 2029.
  • 7Metro assumed various note obligations from PAS, including notes totaling approximately $654 million with maturities ranging from 2011 to 2035 and interest rates between 4.50% and 7.625%.
  • 8Bottling Group, LLC, now a subsidiary of Metro, has outstanding notes totaling approximately $3.55 billion, with some guaranteed by PepsiCo.

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