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Pepsi Company Pepsi Co Synergy That Is Essay

Pepsi Company Pepsi Co

Synergy that is realized when two or more companies merge takes the form of revenue enhancement and cost savings. Cost saving opportunities is often initiated to offset revenue decline. The merger between PepsiCo Inc., Pepsi Bottling Group, Inc., and PepsiAmericas was formalized on Friday 26th, February 2010. This came after PepsiCo Inc. had made clear its intentions to acquire all the outstanding shares of common stock in Pepsi Bottling Group and Pepsi Americas on April 20, 2009 (PepsiCo Inc., 2010). This paper seeks to discuss the revenue enhancements and cost enhancements that were realized after the combination of these companies.

After PepsiCo had acquired Pepsi Bottling Group and Pepsi Americas it realized good results in the first quarter of 2010. This was made possible by their efficient operational ability and solid market place execution. In fact, the benefits of acquisition of Pepsi Bottling Group and Pepsi...

They also posted solid performance in beverages due to the acquisition. The merger also enhanced their growth in developing markets as well as improving their top-line trends in North America. Double digit gains in revenue and core constant profit in the first quarter of 2010 was realized. There were also incremental strategic investments in various investment destinations like China. Management operating cash flow in excess of $794 million was generated. This figure excluded certain items.
The figure was way above 2009 operating cash flow (PepsiCo Inc., 2010). Their net revenue grew by 13% and constant currency net revenue by 11%. PepsiCo Inc.'s cash flow from operations totaled $241 million (PepsiCo Inc., 2010). These growths buoyed the company to spend $735 million in repurchasing shares in the quarter. The company projected to realize core constant currency EPS growth target…

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PepsiCo Inc. (2012). PepsiCo Reports First Quarter 2012 Results. Retrieved July 16, 2012 from http://www.marketwatch.com/story/pepsico-reports-first-quarter-2012-results-2012-04-26

PepsiCo Inc. (2010). PepsiCo Delivers Solid First-Quarter Revenue and EPS Growth. Retrieved July 16, 2012 from http://www.pepsico.com/Download/Q1-2010-Earnings-Release-Tables-Final.pdf
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