PepsiCo Inc.’s announced acquisition of Quaker Oaks Co. will bring together nearly identical-sized defined benefit and 401(k) funds, totaling $4.02 billion.
The 401(k) plans of the two companies are heavily invested in company stock, according to P&I data. Some 46% of Purchase, N.Y.-based PepsiCo’s $800 million 401(k) plan is invested in company stock, while Chicago-based Quaker’s $868 million 401(k) plan has 66% invested in sponsor stock.
The two companies’ 401(k)s use Fidelity Institutional Retirement Services as the key provider of money management and record keeping, according to PepsiCo and the Money Market Directory. Aside from Fidelity managed funds, both offer investment portfolios managed by a few other managers, although none overlaps. In addition, PepsiCo offers participants a self-directed brokerage account.
PepsiCo’s $1.2 billion defined benefit plan has an 18% allocation to company stock, according to the MMD. It has another 62.5% in indexed equities, based on its P&I report. Quaker has 31% in indexed equities in its $1.154 billion defined benefit fund, according to its P&I report. The Quaker MMD listing shows no company stock. The two companies share one defined benefit manager, Barclays Global Investors. Both companies use Northern Trust as master trustee for their defined benefit funds.
Executives from the companies couldn’t be reached for comment.
