Dear
Associates,
I
am delighted to inform you that we have reached a definitive merger agreement
with The Pepsi Bottling Group and PepsiAmericas, Inc. transforming PepsiCo into
an unbelievable Food and Beverage powerhouse with revenues of almost $60B and
pre-tax profits approaching $10B.
"The
dogmas of the quiet past are inadequate to the stormy present"
Abraham Lincoln,
1862
While the existing
model has served the North American Beverage business well, the dynamics of the
North American liquid refreshment beverage business have changed. Retailers have
continued to consolidate and new beverage competitors have emerged with a
proliferation of products and vastly different economics. Customers and
consumers today expect a range of choices that few of us could have imagined a
decade ago.
To
strengthen our position, we need a more flexible and competitive system that can
drive growth across a full range of PepsiCo beverage brands. As an integrated
system, we can more efficiently drive cost synergies, invest in marketing and
product innovation, incubate new health and wellness offerings, and optimize
manufacturing and distribution systems. All of this will allow us to be far more
nimble in the market place and capture additional growth and profit
opportunities far into the future.
Importantly, the
merger will enable us to present a unified face to our customers and take Power
of One to a new level. We'll be much better equipped to provide large retail
accounts with customized solutions and product bundles and it will be much
easier to match products with the right distribution system.
In
the months ahead, it will be critically important that we remain focused on
customer service, marketplace execution and on the 5 priorities for 2009. I know
that you will have many questions about the process and implications of the
merger and I can assure you that we will be communicating regularly on how we
are managing through the changes.
Please join me in
extending a warm welcome to our new associates from PBG and PAS who will be
joining us once the transaction closes. I look forward to starting this new and
exciting chapter together with our best foot forward.
Indra
Read
the full press release.
Cautionary
Statement
This communication
does not constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote or approval. PepsiCo, Inc. ("PepsiCo")
and The Pepsi Bottling Group, Inc. ("PBG") plan to file with the Securities and
Exchange Commission ("SEC") a registration statement on Form S-4 containing a
proxy statement/prospectus and other documents with respect to the proposed
acquisition of PBG and a definitive proxy statement/prospectus will be mailed to
shareholders of PBG. PepsiCo and
PepsiAmericas, Inc.
("PAS") plan to file with the SEC a registration statement on Form S-4
containing a proxy statement/prospectus and other documents with respect to the
proposed acquisition of PAS and a definitive proxy statement/prospectus will be
mailed to shareholders of PAS. INVESTORS AND SECURITY HOLDERS OF PBG AND PAS ARE
URGED TO READ THE APPLICABLE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT
WILL BE FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and
security holders will be able to obtain free copies of the registration
statements and the proxy statements/prospectuses (when available) and other
documents filed with the SEC by PepsiCo, PBG or PAS through the website
maintained by the SEC at http://www.sec.gov. Copies of the documents filed with
the SEC by PepsiCo will be available free of charge on PepsiCo's internet
website at www.pepsico.com
or by contacting PepsiCo's Investor Relations Department at 914-253-3035. Copies
of the documents filed with the SEC by PBG will be available free of charge on
PBG's internet website at www.pbg.com or by contacting
PBG's Investor Relations Department at 914-767-7216. Copies of the documents
filed with the SEC by PAS will also be available free of charge on PAS's
internet website at www.pepsiamericas.com or by
contacting PAS's Investor Relations Department at 612-661-3883.
PBG and its
directors, executive officers and certain other employees may be deemed to be
participants in the solicitation of proxies in respect of the proposed
acquisitions of PBG. Information regarding PBG's directors and executive
officers is available in its Annual Report on Form 10-K for the year ended
December 27, 2008, which was filed with the SEC on February 20, 2009, and its
proxy statement for its 2009 annual meeting of shareholders, which was filed
with the SEC on April 7, 2009. PAS and its directors, executive officers and
certain other employees may be deemed to be participants in the solicitation of
proxies in respect of the proposed acquisitions of PAS. Information regarding
PAS's directors and executive officers is available in its Annual Report on Form
10-K for the year ended January 3, 2009, which was filed with the SEC on March
4, 2009, and its proxy statement for its 2009 annual meeting of shareholders,
which was filed with the SEC on March 18, 2009. Other information regarding the
participants in the proxy solicitations and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in the
proxy statements/prospectuses and other relevant materials to be filed with the
SEC when they become available.
Statements in this
release that are "forward-looking statements" are based on currently available
information, operating plans and projections about future events and trends.
They inherently involve risks and uncertainties that could cause actual results
to differ materially from those predicted in such forward-looking statements.
Such risks and uncertainties include, but are not limited to: PepsiCo's ability
to consummate the acquisitions of PBG and PAS and to achieve the synergies and
value creation contemplated by the proposed acquisitions; PepsiCo's ability to
promptly and effectively integrate the businesses of PBG, PAS and PepsiCo; the
timing to consummate the proposed acquisitions and any necessary actions to
obtain required regulatory approvals; the diversion of management time on
transaction-related issues; changes in demand for PepsiCo's products, as a
result of shifts in consumer preferences or otherwise; increased costs,
disruption of supply or shortages of raw materials and other supplies;
unfavorable economic conditions and increased volatility in foreign exchange
rates; PepsiCo's ability to build and sustain proper information technology
infrastructure, successfully implement its ongoing business process
transformation initiative or outsource certain functions effectively; damage to
PepsiCo's reputation; trade consolidation, the loss of any key customer, or
failure to maintain good relationships with PepsiCo's bottling partners,
including as a result of the proposed acquisitions; PepsiCo's ability to hire or
retain key employees or a highly skilled and diverse workforce; changes in the
legal and regulatory environment; disruption of PepsiCo's supply chain; unstable
political conditions, civil unrest or other developments and risks in the
countries where PepsiCo operates; and risks that benefits from PepsiCo's
Productivity for Growth initiative may not be achieved, may take longer to
achieve than expected or may cost more than currently anticipated.
For additional
information on these and other factors that could cause PepsiCo's actual results
to materially differ from those set forth herein, please see PepsiCo's filings
with the SEC, including its most recent annual report on Form 10-K and
subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place
undue reliance on any such forward-looking statements, which speak only as of
the date they are made. All information in this communication is as of August 4,
2009. PepsiCo undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.