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  "documentTitle": "PepsiCo (PEP)",
  "authorId": "06_Trian_Partners",
  "authorName": "Trian Partners",
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  "presentationDate": "2013-07-01 00:00:00",
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  "notes": "Uses a 'before-after' or 'short-term vs long-term' framing to critique management's capital allocation decisions.",
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      "kind": "callout",
      "text": "Trian is uncertain a 100% focused beverage company would have entered into these transactions",
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      "text": "We believe PepsiCo may have mortgaged its long-term future in key growth markets",
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      "text": "In late-2011, PepsiCo announced an agreement to contribute its Chinese company-owned and JV bottling operations to Tingyi’s beverage subsidiary Tingyi-Asahi Beverages (TAB) in return for a 5% equity interest in TAB with an option to increase its holding to 20% by 2015",
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      "text": "...We believe PepsiCo may have mortgaged its long-term future in key growth markets Gave up control of route to market in two of the most important countries outside the U.S. Will rely on third parties to build PepsiCo's presence",
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      "text": "In mid-2011, PepsiCo announced an agreement to contribute its company-owned Mexican bottling operations to a new joint venture with GEUPEC and Empresas Polar, where GEUPEC was given a majority stake",
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      "text": "While these transactions had several near-term benefits... PepsiCo was reportedly losing ~$180m annually in China (in part, we believe, because of a high-cost infrastructure) Claimed co-branding opportunities and distribution synergies",
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      "text": "Source: PepsiCo SEC filings and Wall Street research including Bank of America 4/23/12.",
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      "text": "China and Mexico Bottling Transactions: Sacrificing Long-Term Value For Short-Term Accretion?",
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