PepsiCo has said that it has no plans to split its snacks and beverage divisions amid predictions by Bernstein analysts that the company was moving closer to splitting its business up into snacks and beverages. Last week, Kraft announced that it will split its north American grocery division from its global snacks business. Analysts at Bernstein said PepsiCo may be closer than ever to splitting the company businesses.
The analysts admitted that they often discuss PepsiCo as a tale of two companies. "Given the seemingly changed tone from CEO Indra Nooyi and Kraft's recent announcement, we wonder whether PepsiCo may be closer than ever to splitting up," they commented. The analysts added that one global snacks company (SnacksCo) and one global beverages company (BevsCo) would probably be the best structure. "SnacksCo would be US$33.2 billion in sales and $6.2 billion in EBIT, while BevsCo would be $36.1 billion in sales and $4.8 billion in EBIT," they revealed. "Our updated analysis suggests circa 14 per cent upside for PepsiCo investors if a split were to occur."
A spokesperson for PepsiCo said that the company has no plans to follow Kraft. “We have a very different portfolio to Kraft and their decision does not change our strategy”, said the company spokesperson. (8 Aug)
© 2011 - ESM: European Supermarket Magazine
