Does Coke Own Pepsi?

Image Credit: Sean Loyless via flickr

Q:

Does Coke own Pepsi?

A:

The Coca-Cola Company (Coke) and Pepsico (Pepsi) are separate publicly traded companies. Coke trades under the stock symbol KO and Pepsi trades under PEP. The two companies are the main competitors in the soda market and have been for several decades.

Brief History

Coco-Cola was created in 1886 while Pepsi began in 1893. Pepsi was original called Brad’s Drink and eventually changed its name to Pepsi-Cola in 1898. Pepsi-Cola struggled in the 1920s and 1930s and went bankrupt both in 1923 and in 1931.

Interestingly, the book For God, Country and Coca-Cola states that Coca-Cola had the chance to buy Pepsi between 1922 and and the early 1930s on three occasions during this period. Coca-Cola never pulled the trigger on the purchase and the companies remain rivals to this day.

Financial Comparison

Below we have provide some key financial figures between these two separate companies. The data reflected below is the latest reported as of November 17, 2017.

CompanyCoca-Cola (KO)Pepsi (PEP)
Stock Price (as of 11/16/2017 close)$46.55$115.23
Market Cap198.334 Billion163.873 Billion
PE Ratio (TTM)49.1623.81
Dividend Yield3.17%2.80%
Annual Total Revenue (2016)$41,863,000$62,799,000,000
Net Income$6,527,000,000$6,329,000,000
Total Asset$87,270,000,000$74,129,000,000
Total Liabilites$64,208,000$63,034,000
Source: Yahoo! Finance

 

Top Brands Owned by Coke & Pepsi

Both Coke and Pepsi own some pretty powerful brands beyond their famous colas. Below is a list of the top brands that each company owns .

Coca-Cola Brands

  • Coca-Cola
  • Sprite
  • Fanta
  • DaSani
  • Minute Maid
  • Ciel
  • Powerade
  • Simply Orange
  • Fresca
  • Vitaminwater
  • Del Valle
  • Smartwater
  • Mello Yello
  • Fuze
  • Honest Tea
  • Odwalla

Pepsi Brands

  • Pepsi
  • Mtn Dew
  • Gatorade
  • Lay’s
  • Tropicana
  • 7Up
  • Doritos
  • Quaker
  • Cheetos
  • Mirinda
  • Lipton
  • Ruffles
  • Tostitos
  • Aquafina
  • Brisk
  • Mist Twist
  • Fritos
  • Walkers
  • Starbucks Ready-to-Drink (Partnership with Starbucks company)

Will Coke Ever Own Pepsi?

At this point the companies are just too big. We doubt that the government would allow Coke to purchase Pepsi, Pepsi to purchase Coke, or a merger due to antitrust laws.

While times are a bit different now, Dr Pepper (NYSE: DPS) attempted to merge with Coca-Cola in 1986, but terminated the agreement because of potential years of litigation with the Federal Trade Commission over antitrust laws. Pepsico also tried to buy 7 Up around this time but this was agreement was also cancelled.  You can read more about the attempted mergers in this Los Angeles Times article.

The failed Pepsi buyout of 7 Up was valued at $380 million and the terminated Coca-Cola merger with Dr. Pepper was valued at $470 million. To put things into perceptive, the combined market value of Coke and Pepsi is approximately $356.79 billion as of November 17, 2017. A buyout or merger would create one company with a dominate position in the beverage market with an additional strong snack food portfolio.