PepsiCo (NYSE: PEP) Agreement to Distribute Certain Dr Pepper Snapple Group Brands

PepsiCo (NYSE: PEP) recently shared that it has reached an agreement with Dr Pepper Snapple Group, Inc. (DPS) to manufacture and distribute certain DPS products following completion of PepsiCo's acquisition of its two anchor bottlers, The Pepsi Bottling Group, Inc. and PepsiAmericas, Inc.  Under the terms of the agreement, DPS will receive an upfront payment of $900 million payable upon closing of the acquisitions. In exchange, PepsiCo will be entitled to manufacture and distribute Dr Pepper and certain other DPS products in the territories where they are currently distributed by PBG and PAS. The agreement between PepsiCo and DPS, which will replace existing agreements PBG and PAS have with DPS, will have an initial term of 20 years, with automatic 20 year renewals thereafter.

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"We are delighted that we have reached a mutually beneficial agreement with Dr Pepper Snapple Group to continue to distribute their products," said Indra K. Nooyi, PepsiCo's Chairman and Chief Executive Officer. "PepsiCo is fully committed to vigorously expand, flawlessly distribute and grow Dr Pepper Snapple's brands in its appointed territories. "Under the new agreement, PepsiCo will distribute: Dr Pepper, Crush and Schweppes brands in the United States; Dr Pepper, Crush, Schweppes, Vernors and Sussex brands in Canada; and Squirt and Canada Dry brands in Mexico. The agreement was anticipated after PepsiCo and its bottlers earlier this year reached an agreement under which PepsiCo would acquire the two anchor bottlers. PepsiCo is on track to complete the acquisitions, subject to regulatory and stockholder approval. The company filed its Form S-4 Registration Statements in preliminary form on October 1, 2009 and expects to close on the proposed transactions by the end of the first quarter of 2010.  PepsiCo offers the world's largest portfolio of billion-dollar food and beverage brands, including 18 different product lines that each generate more than $1 billion in annual retail sales. Our main businesses - Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade - also make hundreds of other tasty foods and drinks that bring joy to our consumers in over 200 countries. With more than $43 billion in 2008 revenues, PepsiCo employs 198,000 people who are united by our unique commitment to sustainable growth, called Performance with Purpose. By dedicating ourselves to offering a broad array of choices for healthy, convenient and fun nourishment, reducing our environmental impact, and fostering a diverse and inclusive workplace culture, PepsiCo balances strong financial returns with giving back to our communities worldwide..