EU approves Pepsi bottlers merger

[October 27, 2009]  LUXEMBOURG (AP) -- The European Union on Tuesday approved the proposed takeover by PepsiCo Inc. of its two top bottling companies for $7.8 billion.

The EU Commission said that the acquisitions of PepsiAmericas and the Pepsi Bottling Group "would not significantly impede effective competition" in Europe.

Pepsi, based in Purchase, N.Y., decided to buy the companies to streamline its operations, save costs and get its soft drinks onto the market more quickly.

The EU Commission found that the activities with the Pepsi Bottline Group "only overlap on the market for beverages in Greece, where the proposed transaction would not lead to a significant increase of market shares."

And since PepsiCo was PBG's exclusive client, "the proposed transaction would not significantly change the market structure," the commission said in a statement.

The commission said that when it came to PepsiAmericas, it concluded that the two "overlap to a very limited extent," causing no competition worries.

For both, the commission concluded there were no competition concerns.

The world's second biggest drink maker had sold the companies only a decade ago to concentrate on its core business of selling soft drinks like Pepsi and Gatorade.

When the soft drinks sales started to slump, Pepsi decided it wanted to own its bottlers again. It said the deals will allow it to respond more quickly to the fast-changing market. Controlling the bottlers means it can do that effectively, and it also means it can better control costs and more tightly manage its business.

[Associated Press; By RAF CASERT]

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