PepsiCo to distribute Dr Pepper Snapple brands
December 9, 2009
PURCHASE, N.Y. — PepsiCo has reached an agreement with Dr Pepper Snapple Group, Inc. to manufacture and distribute certain D.P.S. products following the completion of PepsiCo’s acquisition of its two major bottlers.
“We are delighted we have reached a mutually beneficial agreement with Dr Pepper Snapple Group to continue to distribute their products,” said Indra Nooyi, PepsiCo 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.”
D.P.S. will receive an upfront payment of $900 million payable after the closing of the acquisitions, and in exchange PepsiCo will be entitled to manufacture and distribute Dr Pepper and certain other products in territories where they are currently distributed by The Pepsi Bottling Group and PepsiAmericas. Specifically, PepsiCo will distribute Dr Pepper, Crush and Schweppes in the United States; Dr Pepper, Crush, Schweppes, Vernors and Sussex in Canada; and Squirt and Canada Dry in Mexico.
The agreement will have an initial term of 20 years with automatic 20-year renewals thereafter.
“We’re confident this new arrangement, which maintains our balanced and flexible routes to market, is in the best interests of our brands and our shareholders,” said Larry Young, president and c.e.o. of D.P.S. “It demonstrates the value and growth potential of these great brands and strengthens our third-party route to market while benefiting our own packaged beverages business. We’re excited to be working with PepsiCo and are confident in the continued long-term growth of our business.”