The FINANCIAL — Soft drink and snack foods maker PepsiCo (PEP: News ) announced plans to form a new entity combining the North American operations of Pepsi Bottling Group Inc (PBG.N) and PepsiAmericas Inc (PAS.N). The new unit will be called PepsiCo Bottling North America, or PBNA.
PBNA will comprise all current PBG and PAS operations in the United States, Canada and Mexico, and will account for about three-quarters of the volume of PepsiCo's North American bottling system, with independent franchisees accounting for the rest. PBNA will be separate from the brand-oriented PepsiCo Americas Beverages unit, which will continue to oversee independent bottlers and Gatorade and Tropicana operations, RTT News reported. The separation will allow greater focus for both units and enable PBNA to continue producing and distributing "allied brands" not owned by PepsiCo.
Eric J. Foss, current chairman and CEO of PBG, the world's largest bottler of PepsiCo beverages, will become CEO of the new bottling unit, reporting to PepsiCo Chairman and CEO Indra Nooyi, according to PR Newswire. In naming Foss to lead PBNA, PepsiCo is engaging one of the beverage industry's most experienced executives. "Eric is an extraordinarily talented executive with tremendous knowledge of and love for the bottling business," Nooyi said. "We are fortunate to have him lead this new unit."
"I am extremely excited to lead the new bottling entity," said Foss, the same source reported. "Our focus will be to create a bigger, stronger and faster organization that can better serve our customers and accelerate our growth in North America. I am eager to work with the talented people across PAS, PBG and PepsiCo to reenergize our beverage business, drive profitable growth for our customers and sustain a high performance and compelling environment for our people. It is great to re-join the PepsiCo team, and I look forward to accelerating our potential to become a more unified and integrated beverage system."
The new business will focus on efficiency, Market Watch informs. To facilitate a smooth integration of the businesses, PepsiCo said it will establish a special advisory board, which will include Foss. Shares of PepsiCo rose 1.5% in premarket trading to $61.79.
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