Pepsi buys its two biggest bottling companies


CNBCis reporting that Pepsi (PEP) has finally been able to buy-out two of its largest bottlers.

Pepsi will buy Pepsi Bottling Group (PBG) for $36.50 and PepsiAmericas (PAS) for $28.50. Neither price is much above market.

Pepsi has been trying to buy the two companies since April and investors have bid the stock up. It appears that the transactions were only a matter of time.

It is still not clear how smart the acquisitions are or whether there is substantial benefit for Pepsi to own a larger part of its supply chain. The market clearly thinks there are economies of scale in the deals. It is bidding Pepsi stock up almost 3 percent this morning to $57.84.

Douglas A. McIntyre is an editor at 24/7 Wall St.