The FINANCIAL — PepsiCo announced on March 15 that its Board of Directors approved a plan to increase cash returns to shareholders by raising the company's annual dividend and its share repurchase authorization amount.
PepsiCo Inc., the world’s biggest maker of snack food, authorized the buyback of up to $15 billion in common stock and approved a 7 percent increase in its annual dividend to return cash to investors, according to Bloomberg.
The buyback plan replaces one announced in 2007, which expires in June 2010 and had $6.4 billion remaining at the start of the year, according to a company statement today, the same source reports. Purchase, New York-based PepsiCo said it would repurchase about $4.4 billion of common stock in 2010, a portion of which will be executed under the 2007 plan.
"The board's action reflects continued confidence in the growth of our business and our commitment to providing strong cash returns to our shareholders," said Indra Nooyi, chairman and chief executive of the beverage and snack-food giant, according to The Wall Street Journal.
Last month, Pepsi said its fourth-quarter profit nearly doubled following prior-year commodity hedging charges as revenue increased, the same source informs. The company said it expected to reap bigger-than-expected cost savings from buying its bottlers.
Last month PepsiCo, based in Purchase, N.Y., cleared the final regulatory hurdle in a bid to buy its two biggest bottlers — Pepsi Bottling Group and PepsiAmericas — allowing it to close the $7.8 billion deal, AP reports. That came within days of an announcement by rival Coca-Cola that it would buy the North American operations of its largest bottler, Coca-Cola Enterprises. Both companies want more control of distribution as consumers shift from sugary carbonated drinks to other beverages.
Control over the distribution system will allow Coca-Cola and PepsiCo to rapidly swap out the drinks they're putting on store shelves to accommodate shifting consumer tastes, according to the same source. Both believe they can also slash costs by millions.