Pepsi Bottling Group's Q4: Biding Time Before Merger

PepsiCo (PEP) shareholders are surely interested in the health of the bottling entity. Those who don't own the bottler along with the soda marketer (and I would have to assume that most investors aren't dual owners) will soon be owning both. Pepsi Bottling Group is set to merge with PepsiCo this year.

So, for that reason alone, there's really no compelling argument to purchase shares of the bottler, unless there's some thesis of arbitrage behind it. Instead, those interested in the Pepsi brand would most likely want to look at PepsiCo stock itself.

I myself own Coca-Cola (KO), so I won't be looking at the enemy. However, I do think PepsiCo is a decent core holding for the patient investor. Not only do you get exposure to the beverage industry via a major player, but you receive access to salty snacks via Frito-Lay.

Honestly, I wasn't too taken by Pepsi Bottling Group's Q4 results (the earnings beat was cool, but case-volume growth was not), and I'm not 100% keen on the merger. I would never want to see Coke combine forces with Coca-Cola Enterprises (CCE); I like the model of keeping the bottler and the seller of syrup separate. PepsiCo obviously has a different opinion. The transaction won't sink the latter, certainly, but we'll have to wait for future data to make a proper assessment of the deal's ultimate ramifications.

Disclosure: I own Coke; positions can change without notice.