PepsiCo, Somers, NY, in early December won the beverage-market scramble to acquire uber-brand Gatorade and its parent, Quaker Oats, in a $13.4 billion deal.
The combined companies will boast a valuation of $80 billion and be one of the world’s five-largest consumer products manufacturers. Chicago-based Quaker’s brand portfolio includes Aunt Jemima breakfast foods and Cap’n Crunch cereal, but the deal was all about Gatorade, which commands an 85-percent share of the U.S. sports drink market.
Getting its hands on Gatorade not only gives Pepsi a massive grip on the $2.5 billion sports drink category but a new core product for its non-carbonated beverage segment, which includes Aquafina, FruitWorks, newly acquired SoBe, and joint ventures with Lipton and Starbucks. (To avoid anti-trust concerns in sports drinks, Pepsi plans to sell its existing All-Sport line.) Meanwhile, Quaker’s cereal, rice snacks, and granola bar lines are expected to be aligned with PepsiCo’s Frito-Lay arm.
Although the deal has been approved by both sides, Quaker retained an option to back out if Pepsi’s stock price falls below $40 for more than 10 days in the month proceeding the closing.
Meanwhile, PepsiCo chairman and ceo Roger Enrico began his planned departure from the company sooner than expected. Once the deal closes, Enrico and Quaker chairman Robert Morrison will become vice chairmen of the combined operation, and PepsiCo president Steven Reinmund will assume the chairman/ceo post. Current chief financial officer Indra Nooyi will add president to her duties.
The quest for Quaker took a few turns during November, when Pepsi’s initial offer was turned down by the Quaker Oats’ board and an agreed-upon deal with Coca-Cola was shot down by the beverage maker’s board.
Universal Studios Consumer Products, Universal City, CA, struck an exclusive three-year worldwide merchandising agreement with Toys “R” Us to back the 2002 rerelease of Steven Spielberg’s E.T. The Extra-Terrestrial, which celebrates the film’s 20th anniversary. E.T. merchandise hasn’t been available since the film’s original licensing program in 1982. Paramus, NJ-based Toys “R” Us will develop products across all standard categories including toys, games, puzzles, sporting goods, apparel, accessories, gifts, collectibles, party goods, school supplies, and electronics. The merchandise will be available in 1,553 Toys “R” Us, Kids “R” Us, Babies “R” Us, and Imaginarium stores in 26 countries, as well as through www.toysrus.com, beginning this fall.
Sears, Hoffman Estates, IL, will debut a new line of children’s clothing this spring featuring characters from PBS series Between the Lions. The collection includes sleepwear, backpacks, bedding, and swimwear, and will be available in 860 stores nationwide beginning in March. The chain will kick off the new line by sponsoring a national book drive in which consumers can drop off new or like-new children’s books at Sears locations to assist in collecting one million books for local literacy efforts and libraries.
Kirshenbaum Bond & Partners, New York City, launched Dotglu, a customer-relationship marketing firm. The new business was launched by agency co-founders Richard Kirshenbaum and Jon Bond along with former Foote, Cone & Belding Direct president Tina Cohoe, who will serve as Dotglu ceo. The 40-person Dotglu staff will be based in New York City. Initial clients include Citibank, Wyndham Hotels & Resorts, and DLJ Direct.
Destination portal iWon, Irvington, NY, teamed with online marketing firm Be Free, Marlborough, MA, to launch the iWon Affiliate Network, a performance-based affiliate marketing program. iWon provides promotional links from partnering Web sites to iwon.com, where users can surf the Web, send e-mails, shop, or read news to gain entries to the company’s daily, weekly, monthly, and annual sweepstakes. Affiliate sites earn a commission on each user directed to iwon.com.
Embassy Suites, Memphis, TN, has joined forces with children’s television network Nickelodeon, New York City, on a three-year, $20 million advertising and promotional pact that kicks off May 2001. Hoping to capitalize on the influence kids have on family vacation decisions, the hotel chain will launch a summer retail promotion targeting families to celebrate the 10th anniversary of Nick’s Rugrats series. Additional co-branded efforts will follow.
WELCOME BACK List broker DirectMedia.com, Greenwich, CT, is merging Simon Direct into its existing operations. The transaction is a homecoming: Simon Direct is a card pack and alternative-media publisher that was originally part of Direct Media’s card pack division. In the late 1980s, the unit spun off as a separate company under Jeff Simon, who now returns to DirectMedia.com as vp.
COMFORT MONEY Fleet Capital Corp., Glastonbury, CT, provided a $20 million credit facility to corporate recognition company The Robbins Co., Attleboro, MA, which finalized its merger with CorporateGifts.com, a Web-based provider of corporate incentive and recognition programs. The credit will be used to finance the merger, refinance existing debt, and provide ongoing capital. The new company serves high-profile clients such as United Parcel Service, Ford Motor Co., and Chase Manhattan Bank.
NOVICES NO LONGER Arras Group, Cleveland, OH, closed its first acquisition by buying Cleveland neighbor Brandhouse Consultancy Group, which specializes in the home industry. Brandhouse founder Greg Iszler joins Arras as president of the Home Division.
SAFE BET Media giant Viacom, New York City, will buy Washington, DC-based Black Entertainment Television (BET) in a $2 billion deal. BET owns TV stations, magazines, clubs, and restaurants catering to African-Americans. BET ceo and chairman Robert Johnson will retain his position after the deal closes in early 2001.
BETTER HEALTH FOR PUBLICIS French advertising network Publicis, owner of promotion agencies Frankel and Publicis Dialog, acquired healthcare marketing specialist Nelson Communications. Publicis claims the deal makes it the leading international agency for healthcare marketing.
%% SPECIAL FEATURES 20 Who Made a Difference Search PROMO’s archives to get the background on the industry Movers and Shapers profiled in the December issue. After reading i- promote, browse back issues to see dozens of other examples of successful online and offline integration.
The PROMO 100 A listing of America’s leading promotion marketing agencies.
The PRO Awards 2000 An in depth look at the best promotion campaigns in the U.S. in 15 categories, including case studies of objectives, strategies, and results – with direct links to winners’ Web sites.
The 50 Best-Promoted Brands Get the background on how and why PROMO selected the brands we featured in October’s cover story by perusing the many articles we’ve written on them over the past 18 months.
%% WEEKLY NEWS Top news stories posted each week by the editors of PROMO, with links to daily marketing, advertising, promotion, and direct marketing news feeds.
%% ARCHIVES Search the PROMO archives: a full archive of the last three year’s of PROMO Magazine is available online. After checking out what PROMO has to offer, learn about the many other information services on Marketingclick.com, a newly relaunched site for the marketing community.
Network
