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Pepsico Quaker Oats Merger

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OUTLINE

Introduction ………………… 3

1. The business – economic setting a. The Business Strategy …………………. 4 b. Mission and Strategies …………………. 5

2. PepsiCo Strategic Positioning a. Industry Analysis …………………. 6 b. Company Background ………………… 7 c. Snack Food ………………… 7 d. Beverages ………………… 8 e. Company History – PepsiCo ………………… 9 f. PepsiCo Financial Analysis ………………… 10

3. Terms of the acquisition a. How large was the premium paid to the target ….. 12 b. PepsiCo's Acquisition of Quaker Oats ………… 12 c. Quaker boosts Pepsi’s results ………… 13

4. Merger transaction analysis ………………… 14 a. Target …show more content…

Also when a customer tends to see the same company products everywhere and that too at a slightly elevate rate, and then the element of ‘Buyers illusion’ comes into the picture. The customers tend to believe that the product is priced higher as it is superior in quality and better as compared to other similar products priced at a lower rate.

Any company prefers to diversify and systematically target and capture certain market segments in order to provide that segment superior quality service and kill all forms of competition from that segment. This seems to be the goal of PepsiCo too. It wants to diversify from being a supplier of just carbonated drinks and branch into fruit drinks. To do this the merger was the ideal option, because along with the Quaker company they are also buying its goodwill and market share. This way they can systematically cater to every possible need of the sports segment right from the choice of drinks to providing snacks.

This brings to the role of regulatory bodies, which are created to prevent the dealings between companies, which might prove detrimental to consumers in the long run. They prevent tie-ups between companies that would kill competition and also prevent price discrimination.

On a final note, acquisitions and mergers have their own positive as well as flip sides. On the positive side smaller firms with fewer resources could continue to thrive in the

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