Filing Flows › PepsiCo (PEP) › Takeover & LBO
Is PepsiCo (PEP) a takeover target?
A leveraged buyout at today's price plus 30% ($185.52 a share) would return about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $98.63 a share (−31% against today's $142.71). At $298.4B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 3.1% of companies with its figures were bought within a year (0.61× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $185.52 | today's $142.71 plus 30% |
| × shares | 1,372.0 million | |
| = Equity value | $254.5B | |
| + Debt refinanced | $53.2B | |
| − Cash | $9.5B | |
| + Other claims | $141M | preferred stock, minority interests |
| = Enterprise value | $298.4B | 20.0× EBITDA of $14.9B |
| Fees | $6.0B | 2% of the price |
| New debt | $82.2B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $222.1B | 73% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $100.8B | $16.1B | $6.3B | $3.2B | $79.0B |
| Year 2 | $107.2B | $17.1B | $6.0B | $4.0B | $75.0B |
| Year 3 | $112.7B | $17.9B | $5.7B | $4.8B | $70.2B |
| Year 4 | $117.3B | $18.7B | $5.4B | $5.6B | $64.6B |
| Year 5 | $120.9B | $19.2B | $4.9B | $6.4B | $58.2B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 16.0× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $308.3B | |
| − Debt left | $58.2B | |
| = Buyer's equity | $250.1B | |
| Money multiple | 1.13× | on $222.1B put in |
| Buyer's yearly return (IRR) | 2.4% |
Price against return
What the buyer makes at other premiums over today's $142.71; the IRR reaches 20% at $98.63 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $156.98 | 6.5% |
| 20% | $171.25 | 4.4% |
| 30% | $185.52 | 2.4% |
| 40% | $199.79 | 0.7% |
| 50% | $214.06 | −0.9% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $93.9B | |
| EBITDA, last 12 months | $14.9B | 15.9% of revenue |
| Depreciation and amortization | $3.5B | |
| Capital spending | $4.4B | |
| Debt | $53.2B | |
| Cash | $9.5B | |
| Share price | $142.71 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 7.4% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 19% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, PepsiCo would cost about $189.09 a share, $259.4B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $171.25 | $235.0B |
| Median | 32.5% | $189.09 | $259.4B |
| High end (a quarter paid more) | 51.8% | $216.63 | $297.2B |
The odds, from history
Historically 3.1% of companies with its figures were bought within a year (0.61× the average). Its figures put it in decile 2 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
PepsiCo's latest quarter
PepsiCo, Q3 2026: revenue $25.3B (+6% year over year), operating margin 16.9%, net earnings $3.1B, operating cash flow $5.6B. The chart follows the revenue to costs, profit and cash.
Questions
Is PepsiCo being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy PepsiCo?
A leveraged buyout at today's price plus 30% ($185.52 a share) would return about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $98.63 a share (−31% against today's $142.71). At $298.4B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of PepsiCo cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, PepsiCo would cost about $189.09 a share, $259.4B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.