PBG rejected a previous offer of $6 billion as "grossly inadequate." PepsiCo would save much more from the merger than the $200-million-a-year figure it had used to reach its offering price, PBG said. PepsiCo has since revised its estimate to $300 million, though some analysts still think that number is low.
PepsiCo sold off the bottlers in 1999, but the industry has changed. It's no longer primarily just about carbonated soft drinks, and the buyback will allow PepsiCo to make changes or introduce new products more quickly.
As PepsiCo CEO Indra Nooyi put it, "It makes us far more nimble."
A Wall Street Journal blog gives details on how the final deal came to be, but cites only an anonymous "person familiar with the matter."