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PepsiCo reaches distribution agreement with Dr Pepper
PepsiCo has reached an agreement with Dr Pepper Snapple Group Inc to manufacture and distribute certain DPS products following completion of PepsiCo’s acquisition of its two anchor bottlers, The Pepsi Bottling Group Inc and PepsiAmericas Inc.
Under the terms of the agreement, DPS will receive an upfront payment of $900m payable upon closing of the acquisitions. In exchange, PepsiCo will be entitled to manufacture and distribute Dr Pepper and certain other DPS products in the territories where they are currently distributed by PBG and PAS.
The agreement between PepsiCo and DPS, which will replace existing agreements PBG and PAS have with DPS, will have an initial term of 20 years, with automatic 20-year renewals thereafter.
“We’re delighted that we have reached a mutually beneficial agreement with Dr Pepper Snapple Group to continue to distribute their products,” said Indra Nooyi, PepsiCo’s chairman and CEO. “PepsiCo is fully committed to vigourously expand, flawlessly distribute and grow Dr Pepper Snapple’s brands in its appointed territories.”
Under the new agreement, PepsiCo will distribute:
- Dr Pepper Crush and Schweppes brands in the US
- Dr Pepper, Crush, Schweppes, Vernors and Sussex brands in Canada
- Squirt and Canada Dry brands in Mexico.
Source: PepsiCo
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