Friday, June 8, 2007

Pepsi Increasing Global Dominance

Yesterday Pepsi Co.(PEP) & Pepsi Americas, Inc. (PAS) outbid Coca-Cola (KO) for the majority stake in Ukrainian juice maker Sandora. Pepsi and Pepsi Americas, Inc. acquired 80 percent of Sandora for $542 million dollars. This acquisition will help to increase Pepsi's growing international business.

Robert C. Pohlad, chairman and CEO of PepsiAmericas, said, "We have a clear strategy to grow through the expansion of our international business, and Sandora is a great fit. It provides immediate scale in a high-growth market and a strong business platform to leverage and expand into other categories. Ukraine's emerging economy and beverage market, coupled with Sandora's strong brands and distribution capabilities, provide significant growth potential."

This acquisition should help in allowing Pepsi to continue providing investors with quarterly growth exceeding 9 percent. Pepsi currently has strong exposure within the US but has limited growth opportunities domestically. This acquisition will allow Pepsi to continue expanding through its international division.

Pepsi is a great long term stock that consistently outperforms. With a p/e ratio around 19 and a dividend yield over 2 percent this is a great stock for an IRA. PEP is currently trading around $66 a share.


Anonymous said...

Pas = Pespi Americas is currently 23.50

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