Supplement | HBS Case Collection | October 2008 (Revised September 2011)

PepsiCo's Bid for Quaker Oats (C)

by Carliss Y. Baldwin

Abstract

Third in a series of PepsiCo's bid for Quaker Oats. Describes the auction for Quaker Oats including terms of the bids. After winning the auction, Coke's stock price fell dramatically. Coke's Board then refused to approve the deal and withdrew. Quaker then approached Pepsi, the losing bidder, and asked them to submit another bid. The case can be used to teach the mechanics of collared consideration, announcement effects, the prerogatives of a board of directors, and negotiating strategy.

Keywords: Mergers and Acquisitions; Stocks; Governing and Advisory Boards; Auctions; Bids and Bidding; Negotiation Tactics; Valuation; Food and Beverage Industry;

Citation:

Baldwin, Carliss Y. "PepsiCo's Bid for Quaker Oats (C)." Harvard Business School Supplement 209-070, October 2008. (Revised September 2011.)