There is a new twist in the Pepsico, Inc. (NYSE: PEP) ‘hopeful’ acquisition of Pepsi Bottling Group Inc. (NYSE: PBG). Pepsi Bottling Group Inc. has decided to make an acquisition of its own.  It could even possibly have ramifications for the proposed PepsiAmericas Inc. (NYSE: PAS) buyout, although that may be a stretch on a one-off basis.

The Pepsi Bottling Group announced that it has signed a Letter of Intent to acquire Pepsi-Cola Bottlers for the Merrimack Valley, Inc.  This is not a large deal considering the size of the company, even if financial terms are not disclosed.  The Massachusetts operation employs only about 70 people.

This small company is a Pepsi-Cola franchised bottler serving northeastern Massachusetts and has been a family-owned and Pepsi-licensed company with operations for the last five decades.

PBG said this expands its U.S. footprint across contiguous territories and enhances its ability to meet customer needs. The transaction announced today is expected to be completed during the third quarter of 2009, and as noted the financial terms were not disclosed.

Back in March, PBG announced plans to acquire Better Beverages, Ltd., which serves portions of central Texas; and last September it acquired Lane Affiliated Companies, with operations in Colorado, Arizona and New Mexico. In March 2008, it acquired Pepsi-Cola Batavia Bottling Corp., serving parts of upstate New York.

Making a small acquisition is certainly not an outright ‘fending off’ of a larger buyer.  But it is a statement that the company is making, with a show that it intends to grow and intends to keep on its path of either being independent or fetching a higher price.  There is a reason this trades at a premium to the merger price.

PBG shares are up 0.5% at $32.05, and that is $2.55 above the $29.50 per share buyout price; its 52-week trading range is $15.78 to $33.54.

JON C. OGG

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