PepsiCo May Spin Off Bottling Operations

PepsiCo Inc. is considering separating its soft drink bottling operations into a publicly owned company in a move that could generate a huge amount of cash and free it to focus on its marketing battles with industry leader Coca-Cola Co. PepsiCo now owns bottling operations that account for about 57% of the volume of Pepsi-Cola products sold in the United States and 75% in Canada. The new bottling company would own all of the company-owned Pepsi-Cola bottling operations in North America and possibly some international operations, PepsiCo said. The sale could generate “literally billions of dollars,” said analyst Emanuel Goldman of PaineWebber. Purchase, N.Y.-based PepsiCo would be following Coca-Cola’s lead in setting up a separate publicly traded company as its main bottler. Most of Coca-Cola’s U.S. bottling operations are owned by Coca-Cola Enterprises Inc., created in 1986 when Coca-Cola sold a 51% stake in its domestic company-owned bottling operations to the public.