By Josh Brooks

PepsiCo is set to make the biggest packaging deal so far this year after it offered $6bn to buy its two largest bottling companies in North America.

 

The drinks giant said that the proposed buy-outs of The Pepsi Bottling Group and PepsiAmericas would create better integration in its supply chain and would allow PepsiCo to bring product and package innovation to market more quickly than it can at present.

 

Should the deal go through, PepsiCo would control the full supply chain for 80% of its total North American beverage output.

 

In this morning's statement on the offer, PepsiCo chairman and chief executive Indra Nooyi said that the planned acquisition was the result of changes both in the beverage market and among customers.

 

"Our operating environment has evolved dramatically in the last decade. Retailers have continued to consolidate. New competitors have emerged. And non-carbonated drinks, which have different economics and different distribution systems than carbonated soft drinks, have become a much bigger factor in the industry and in our own portfolio."

 

Nooyi said that the new-look business would bring major cost savings, estimated at up to $200m per year, and would make the company more responsive to customers.

 

"We would be able to present a more unified face to our retail and food service customers, which would better position us to provide customized solutions, as we do at Frito-Lay, and to take to a new level our 'Power of One' programme of bundled food and beverage offerings," she said.

 

PepsiCo has offered $29.50 per share for The Pepsi Bottling Group and $23.27 per share for PepsiAmericas.

From: packagingnews.co.uk