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| <NonNumbericText> <div> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="3"><b>Note 15 — Acquisition of Common Stock of PBG and PAS</b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px" align="justify"> <font style="FONT-FAMILY: Times New Roman" size="3">On August 3, 2009, we entered into the PBG Merger Agreement and the PAS Merger Agreement.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px" align="justify"> <font style="FONT-FAMILY: Times New Roman" size="3">The PBG Merger Agreement provides that, upon the terms and subject to the conditions set forth in the PBG Merger Agreement, PBG will be merged with and into Metro (the PBG Merger), with Metro continuing as the surviving corporation and our wholly owned subsidiary. At the effective time of the PBG Merger, each share of PBG common stock outstanding immediately prior to the effective time not held by us or any of our subsidiaries will be converted into the right to receive either 0.6432 of a share of PepsiCo common stock or, at the election of the holder, $36.50 in cash, without interest, and in each case subject to proration procedures which provide that we will pay cash for a number of shares equal to 50% of the PBG common stock outstanding immediately prior to the effective time of the PBG Merger not held by us or any of our subsidiaries and issue shares of PepsiCo common stock for the remaining 50% of such shares. Each share of PBG common stock held by PBG as treasury stock, held by us or held by Metro, and each share of PBG Class B common stock held by us or Metro, in each case immediately prior to the effective time of the PBG Merger, will be canceled, and no payment will be made with respect thereto. Each share of PBG common stock and PBG Class B common stock owned by any subsidiary of ours other than Metro immediately prior to the effective time of the PBG Merger will automatically be converted into the right to receive 0.6432 of a share of PepsiCo common stock.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px" align="justify"> <font style="FONT-FAMILY: Times New Roman" size="3">The PAS Merger Agreement provides that, upon the terms and subject to the conditions set forth in the PAS Merger Agreement, PAS will be merged with and into Metro (the PAS Merger, and together with the PBG Merger, the Mergers), with Metro continuing as the surviving corporation and our wholly owned subsidiary. At the effective time of the PAS Merger, each share of PAS common stock outstanding immediately prior to the effective time not held by us or any of our subsidiaries will be converted into the right to receive either 0.5022 of a share of PepsiCo common stock or, at the election of the holder, $28.50 in cash, without interest, and in each case subject to proration procedures which provide that we will pay cash for a number of shares equal to 50% of the PAS common stock outstanding immediately prior to the effective time of the PAS Merger not held by us or any of our subsidiaries and issue shares of PepsiCo common stock for the remaining 50% of such shares. Each share of PAS common stock held by PAS as treasury stock, held by us or held by Metro, in each case, immediately prior to the effective time of the PAS Merger, will be canceled, and no payment will be made with respect thereto. Each share of PAS common stock owned by any subsidiary of ours other than Metro immediately prior to the effective time of the PAS Merger will automatically be converted into the right to receive 0.5022 of a share of PepsiCo common stock.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px" align="justify"> <font style="FONT-FAMILY: Times New Roman" size="3">On February 17, 2010, the stockholders of PBG and PAS approved the PBG and PAS Mergers, respectively. Consummation of each of the Mergers is subject to various conditions, including the absence of legal prohibitions and the receipt of regulatory approvals. On February 17, 2010, we announced that we had refiled under the HSR Act with respect to the Mergers and signed a Consent Decree proposed by the Staff of the FTC providing for the maintenance of the confidentiality of certain information we will obtain from DPSG in connection with the manufacture and distribution of certain DPSG products after the Mergers are completed. The Consent Decree is subject to review and approval by the Commissioners of the FTC. We hope to consummate the Mergers by the end of February 2010.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px" align="justify"> <font style="FONT-FAMILY: Times New Roman" size="3">We currently plan that at the closing of the Mergers we will form a new operating unit. This new operating unit 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 most of the rest. This new operating unit will be included within the PAB business unit. Current PBG and PAS operations in Europe, including Russia, will be managed by the Europe division when the Mergers are completed.</font></p> </div> </NonNumbericText> |
| <NonNumericTextHeader> Note 15 — Acquisition of Common Stock of PBG and PAS On August 3, 2009, we entered into the PBG Merger Agreement and the PAS Merger </NonNumericTextHeader> |
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