Blog

Pepsi and Vertical Integration

Geoff Riley

21st April 2009

Here is a great example for the revision notes on business growth. PepsiCo which also includes the Tropicana and Gatorade brands within its business has made a $6bn cash and stock offer for the Pepsi Bottling Group and PepsiAmericas. Pepsi already owns sizeable equity stakes in both of these huge bottling businesses - but it has taken advantage of the low stock market and a handy cash mountain to make a takeover bid. It is a classic case of backward vertical integration and a report in the Financial Times says that PepsiCo expects the integration to cut costs by about $200m annually. Britvic is PepsiCo’s bottler in the UK. Keep an eye out for Britvic making a move on smaller bottling companies elsewhere in the European Union.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

You might also like

© 2002-2024 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.