PepsiCo to buy bottlers in deals totaling $7.8B

NEW YORK -- The company spun off its bottler a decade ago so it could concentrate more on the then-booming soft drink business. But in the years, consumers have gravitated toward healthier options like juices and teas, leaving soft drink sales to slump.

"We believe we are taking a very important step to strategically reshape the North American beverage business," said PepsiCo CEO Indra Nooyi.

PepsiCo will pay $36.50 a share for the shares it does not own of Somers, N.Y.-based Pepsi Bottling Group and $28.50 a share for the shares it does not own of Minneapolis-based PepsiAmericas.

Both offers are half stock and half cash.

At the time of the Purchase, N.Y.-based company's initial $6 billion offers for the bottlers in April, it owned 33% of Pepsi Bottling Group and 43% of PepsiAmericas. The bottlers had rejected the offers, saying it undervalued them. Analysts said the deals would go through if PepsiCo boosted its offer.

PepsiCo believes that owning the bottlers will help it save about $300 million a year by 2012, up from original estimates of $200 million, which analysts said was too low.

Stifel Nicolaus analyst Mark Swartzberg told clients in a note he expected the deals to mean savings of $450 million.