There are rumors about a possible merger between the industry leader Anheuser-Busch InBev beer and beverage division of PepsiCo.
In recent years, although separate from the legal point of view, these two companies have built a unique collaboration: in 2009, they signed in the US an agreement for a joint supply with the aim of saving in office supplies, computers and other materials. In a more visible way, last year, the two companies have started to cooperate with regard to advertising in retail outlets. The two companies are also already linked to a distribution point: the Brazilian producer of beer Ambev, controlled by AB InBev, bottled and distributed Pepsi soft drink in Brazil, Argentina and Central America since 2000, besides to produce and distribute PepsiCo’s Gatorade in the region.
As reported by Bloomberg Businessweek this year, the growth forecasts for the beer sector are just 4% over the next 10 years compared to 14% in the previous decade. As always, AB InBev has opted for a growth based on acquisitions rather than an increase in sales of existing products. But a full acquisition of PepsiCo does not comply with antitrust rules, while the purchase of the soft drink division of PepsiCo Americas Beverages, which represents about one-third of the net revenues of PepsiCo and only 26% of its operating profits, could be accepted.
From a strategic point of view, this acquisition would not seem so meaningless: there is a clear policy of AB InBev to cut costs and distribution especially at this time of stagnation in the beer market and the open up the world of soft drinks would AB InBev to become a giant drinks rather than just beer and spirits.
