PepsiAmericas

PepsiAmericas was a United States-based beverage bottling company and one of the largest independent bottlers of Pepsi-Cola products. It operated under agreements with PepsiCo, the owner of the Pepsi beverage brands, and also produced and distributed beverages for Dr Pepper Snapple Group and smaller regional brands. The company was headquartered in Minneapolis, Minnesota, and built a geographically diversified network spanning the United States, Central and Eastern Europe, Spain, and the Caribbean. The PepsiAmericas name was associated with more than one stage of corporate development. The original PepsiAmericas was formed in 1986 through the consolidation of regional Pepsi bottlers in the northern Midwest. The business also had interests and territories in the Caribbean and became the third-largest Pepsi bottler in the United States. In 2000, Whitman Corporation acquired the original PepsiAmericas and adopted the PepsiAmericas name for the combined company, moving the headquarters to Minneapolis. The company’s broader corporate ancestry included Whitman’s earlier involvement in Pepsi bottling. Whitman traced its roots to a company founded in 1851 as the Illinois Central Railroad. After reorganizing as Illinois Central Industries in 1962, it diversified into other businesses and acquired Pepsi-Cola General Bottlers of Chicago in 1972. That transaction made it the second-largest Pepsi bottler in the United States at the time. The corporate parent became IC Industries in 1975 and Whitman Corporation in 1988, following the separation of the railroad business. PepsiAmericas operated a capital-intensive bottling and distribution model. Its activities included beverage production, packaging, warehousing, route distribution, sales execution, and servicing retail and food-service customers. Its United States network included 19 bottling plants, while its international operations extended across 11 countries in Central and Eastern Europe and five Caribbean countries. The company’s portfolio was centered on PepsiCo products such as Pepsi and Mountain Dew, supplemented by products from other brand owners where local contracts permitted. By early 2009, PepsiCo held approximately 41.1 percent of PepsiAmericas. On April 20, 2009, PepsiCo proposed acquiring the remaining shares through a combination of cash and PepsiCo stock. PepsiCo subsequently pursued the acquisition of Pepsi Bottling Group, the largest Pepsi bottler, as part of a broader effort to integrate its bottling operations. After regulatory review, both acquisitions were completed on February 26, 2010. PepsiAmericas and Pepsi Bottling Group were combined into Pepsi Beverages Company, a wholly owned PepsiCo subsidiary. PepsiAmericas therefore ceased to operate as an independent publicly traded company, although many of its bottling, distribution, and market operations continued within PepsiCo’s integrated beverage organization.

PepsiAmericas developed from the consolidation of regional Pepsi bottling businesses and from the longer corporate history of Whitman Corporation. The original PepsiAmericas was established in 1986 in Minneapolis through the combination of bottlers serving the northern Midwest. Its business model was based on producing, packaging, selling, and distributing Pepsi-Cola beverages under contractual arrangements with PepsiCo. It also maintained bottling and distribution interests in the Caribbean and eventually became the third-largest Pepsi bottler in the United States. A significant predecessor to the later company was Pepsi-Cola General Bottlers of Chicago. Whitman Corporation’s corporate lineage began with the Illinois Central Railroad, founded in 1851. After the organization diversified and reorganized as Illinois Central Industries in 1962, it acquired Pepsi-Cola General Bottlers in 1972. The acquisition made Whitman’s predecessor the second-largest Pepsi bottler in the United States. The parent company adopted the name IC Industries in 1975 and later became Whitman Corporation in 1988 after separating the railroad business. In 2000, Whitman Corporation acquired the original PepsiAmericas. Whitman retained the PepsiAmericas name and used Minneapolis as the headquarters of the combined bottling company. Under this structure, PepsiAmericas expanded its geographic footprint and operated in the United States, Central and Eastern Europe, Spain, and the Caribbean. Its United States network comprised 19 bottling plants. Internationally, the company had a presence in 11 Central and Eastern European countries and five Caribbean countries. In addition to PepsiCo brands, PepsiAmericas held agreements to produce or distribute beverages associated with Dr Pepper Snapple Group and smaller regional brands. PepsiCo increased its ownership over time and held a 41.1 percent stake by early 2009. On April 20, 2009, PepsiCo made a proposal for the outstanding PepsiAmericas shares. The proposed consideration consisted of cash and PepsiCo stock, reflecting PepsiCo’s broader strategy of bringing major independent bottlers into a more integrated manufacturing and distribution system. PepsiCo also made an offer for Pepsi Bottling Group in 2009. The transactions received regulatory scrutiny and were completed on February 26, 2010. PepsiCo acquired full ownership of PepsiAmericas and Pepsi Bottling Group and combined their operations into Pepsi Beverages Company. This ended PepsiAmericas’ existence as an independent listed bottling company. Its operating assets and market activities continued within PepsiCo’s beverage business, but the PepsiAmericas corporate entity and stock listing became defunct.

1. 2010PepsiAmericas is absorbed into Pepsi Beverages Company

   PepsiCo completed its acquisition of PepsiAmericas and Pepsi Bottling Group and combined them into Pepsi Beverages Company.

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2. 2009PepsiCo proposes full acquisition

   PepsiCo, which held a minority stake, offered to acquire the remaining PepsiAmericas shares through a cash-and-stock proposal.

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3. 2000Whitman acquires PepsiAmericas

   Whitman Corporation acquired the original PepsiAmericas and assumed its name and Minneapolis headquarters.

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4. 1988IC Industries becomes Whitman Corporation

   Following the separation of the railroad business, the parent company adopted the Whitman Corporation name.

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5. 1986Original PepsiAmericas is formed

   Regional Pepsi bottlers in the northern Midwest were consolidated into the original PepsiAmericas, which also had Caribbean interests.

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6. 1975Parent adopts the IC Industries name

   The diversified corporate parent changed its name to IC Industries.

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7. 1972Whitman predecessor acquires Pepsi-Cola General Bottlers

   The acquisition of Pepsi-Cola General Bottlers of Chicago made the company the second-largest Pepsi bottler in the United States at that time.

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8. 1962Illinois Central reorganizes as a diversified holding company

   The railroad organization reorganized as Illinois Central Industries and expanded into other businesses.

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9. 1851Corporate ancestry begins with Illinois Central Railroad

   The corporate lineage later associated with PepsiAmericas traces back to the founding of the Illinois Central Railroad.

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Large-scale bottler, manufacturer, and distributor of Pepsi-Cola and other packaged beverages

• PepsiCarbonated soft drink

  PepsiAmericas bottled and distributed Pepsi-Cola products under agreements with PepsiCo. Pepsi was the central flagship beverage in the company’s portfolio and was manufactured, packaged, warehoused, and delivered through the company’s bottling and route-distribution network.

• Mountain DewCarbonated soft drink

  Mountain Dew was among the PepsiCo beverage brands handled through PepsiAmericas’ bottling and distribution operations. The company’s role was primarily operational and commercial rather than brand ownership: it produced and moved packaged beverages within assigned territories.

• 7 UpCarbonated soft drink

  7 Up was included among the regional soft-drink products associated with PepsiAmericas’ bottling portfolio. The company also held contracts involving beverages owned by other brand groups and smaller regional producers.

• 2010PepsiCo completes bottler consolidationM&A

  PepsiCo pursued the acquisitions of PepsiAmericas and Pepsi Bottling Group to integrate major bottling operations with the beverage company’s wider system.

  What changed. After regulatory review, PepsiCo completed both acquisitions on February 26, 2010 and combined the businesses into Pepsi Beverages Company.

  Aftermath. PepsiAmericas ceased to exist as an independent listed company, while its operating activities continued within a wholly owned PepsiCo subsidiary.

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• 2009PepsiCo proposes acquisition of outstanding PepsiAmericas sharesM&A

  PepsiCo already held a 41.1 percent stake in PepsiAmericas by early 2009 and sought to consolidate ownership of a major independent bottler.

  What changed. On April 20, 2009, PepsiCo proposed purchasing the remaining shares with a combination of cash and PepsiCo stock.

  Aftermath. The transaction proceeded through regulatory review and was completed in 2010, ending PepsiAmericas’ independent public-company status.

  Proposed consideration per PepsiAmericas share. $11.64 in cash plus 0.223 PepsiCo shares (Offer announced April 20, 2009)

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• 2010PepsiCo completes acquisition of PepsiAmericas and Pepsi Bottling Group

  Following regulatory review, PepsiCo completed the acquisitions of PepsiAmericas and Pepsi Bottling Group. The two bottlers were combined into Pepsi Beverages Company, a wholly owned PepsiCo subsidiary.

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• 2009PepsiCo offers to acquire remaining PepsiAmericas shares

  PepsiCo announced an offer to purchase the shares of PepsiAmericas that it did not already own. The proposed consideration combined cash with PepsiCo shares and was intended to bring the bottler fully under PepsiCo control.

  M&A
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1. PepsiAmericas