Connect with us

Headlines

It's the Oatmeal Generation

Pepsi-Quaker Oats merger will create p-o-p powerhouse

Published

on

Shareholders of PepsiCo, Inc. (Purchase, N.Y.), the $20 billion soft drink and snack food conglomerate, have overwhelmingly approved the purchase of The Quaker Oats Co. (Chicago) for about $14 billion in stock. The new $25 billion company — Pepsi's retort to Coca-Cola's recently announced joint venture with Procter & Gamble — would become one of the world's five largest food and beverage companies, a bigger, stronger and more diverse p-o-p marketer. Quaker Oats is best know for its hot cereals, but the $5 billion company also owns such brands as Aunt Jemima, Rice-A-Roni, Cap'n Crunch and Gatorade.

The planned merger, which was announced in December 2000, still requires FTC clearance. It has been approved by regulators in Europe and Mexico. In a related move that is expected to ease regulatory concern, PepsiCo announced it had reached an agreement to sell its sports drink, All Sport, to Monarch Co., an Atlanta-based beverage company (Dad's Root Beer, Bubble Up, Moxie). All Sport (4.4 percent market share) ranks third in the $2.6 billion-a-year sports drink category, behind Quaker's Gatorade (78 percent) and Coca-Cola's Powerade (15 percent).

The merged company, which will retain the PepsiCo, Inc. name, will own 12 brands that each generate over $1 billion in annual retail sales, and another five that each generate over $500 million. It will be the world leader in snacks, offering a wide range of snacks from Frito-Lay (a Pepsi subsidiary that makes Doritos, Tostitos and Fritos corn chips and Lay's, Ruffles and Wow! potato chips) as well as the portfolio of Quaker granola bars, rice snacks and fruit and oatmeal bars. It also will be the world's second-largest refreshment beverage company, and a leader in the rapidly growing non-carbonated beverage market, with brands including Pepsi, Tropicana, Mountain Dew, Gatorade, Lipton tea and Aquafina bottled water.

“I'm delighted by the results of the shareholder vote and appreciate their support,” said Roger Enrico, PepsiCo chairman and ceo. “Our shareholders recognize that this merger will enhance our growth opportunities very significantly for many years to come.” Quaker shareholders had also approved the plan earlier in the day.

The merger is expected to be completed by June 30, 2001.

Advertisement

Advertisement

SPONSORED HEADLINE

7 design trends to drive customer behavior in 2024

7 design trends to drive customer behavior in 2024

In-store marketing and design trends to watch in 2024 (+how to execute them!). Learn More.

Promoted Headlines

Advertisement
Advertisement

Subscribe

Advertisement

Facebook

Most Popular