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PepsiCo to pay Dr Pepper Snapple nearly $1B for certain distribution rights
03:46 PM CST on Tuesday, December 8, 2009
PepsiCo, the nation’s second largest soft drink maker, will pay Plano-based Dr Pepper Snapple Group Inc. nearly $1 billion for the right to continue making and distributing several Dr Pepper brands in the U.S., Canada and Mexico, the two companies said Tuesday.
The brands – including Dr Pepper, Crush and Schweppes in the United States – are now being distributed by The Pepsi Bottling Group, Inc. and PepsiAmericas, Inc., Pepsico’s two largest bottlers. PepsiCo is buying the two bottlers.
Under the agreement, PepsiCo, which owns Plano-based Frito-Lay Inc., will pay Dr Pepper $900 million for the manufacture and distribution rights. PepsiCo still will have to buy the syrup used to make the drinks from Dr Pepper, a Dr Pepper spokesman said. The deal, which replaces existing agreements between Dr Pepper and the bottlers, runs for 20 years, with automatic 20-year renewals after that.
PepsiCo is still awaiting approval from regulators and shareholders of Pepsi Bottling and PepsiAmericas for the acquisitions.
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