What potential synergies existed between KFC and PepsiCo?
Kentucky Fried Chicken (KFC) was acquired by Pepsi-Cola, Incorporated (PepsiCo) in 1986. KFC is a fastfood restaurant chain based in Louisville, Kentucky and is known worldwide for its fried chicken. On the other hand, PepsiCo is a global beverage and snack company. At that time, PepsiCo was expanding in the quick service restaurant segment. They found out that fastfood marketing was very similar to soft drinks and snack food marketing. The company formed the PepsiCo Worldwide Restaurants to create synergism among its restaurant companies. PepsiCo chose to acquire KFC because weaker chains in the chicken industry would eventually leave the market and KFC still had room to grow specifically in the Northeast and Mid-Atlantic regions. On KFC’s part, it is an international strategy wherein their global goals could materialize. In order to distribute PepsiCo products, the company formed partnerships with several brands and acquired some brands. The PepsiCo acquired KFC for $850 million cash
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