The Frito-Lay Company is a major producer of savory snack foods in the United States. From its humble roots as two small snack distributors, Frito-Lay came to dominate the snack business. Frito-Lay ceased being an independent company in 1965 and is now a wholly owned subsidiary of PepsiCo. Frito-Lay is an important component of PepsiCo and its performance often reflects in PepsiCo's stock price.
Frito-Lay History & Merger with Pepsi
The Frito-Lay company was founded in 1961 by the merger of H.W Lay & Company and the Frito Company. Both companies were active in the salty snack food business. H.W Lay & Company began in 1909 as a small snack food distributor and manufacturer in the Tennessee Valley. The company's marquee product, Lay's potato chips, was introduced in 1944. The Frito Company was started in 1932 when Elmer Doolin purchased a small corn chip manufacturing outfit for $100. The company expanded in the next 30 years, distributing its Frito's brand across the country and acquiring the Ruffle's potato chip brand as well. The Frito-Lay Company and The Pepsi-Cola company merged in 1965, with Frito-Lay becoming a wholly owned subsidiary of the merged entity.
The Pepsi/Frito-Lay merger was structured so that Frito-Lay shareholders on record as of June 10, 1965, would receive 2/3 a share of the new merged company for every existing share owned. Pepsi-Cola shareholders received one share in the new company for every share owned.
PepsiCo, the successor company to Frito-Lay, is traded publicly on the New York Stock Exchange under the ticker symbol PEP. Currently, the company's primary products are carbonated and non-carbonated beverages, savory snack foods, and breakfast cereals. The company historically owned restaurants such as KFC, Pizza Hut, and Taco Bell, but those entities have been spun off. Pepsi has also owned some companies outside of the food and beverage business, such as Wilson Sports.
Splits and Adjustments
PepsiCo has had five stock splits since 1965. The company's stock split 2-for-1 on June 9, 1967, and May 28, 1996. The company's stock split 3-for-1 on May 5, 1977, May 28, 1986, and Sept. 4, 1990.
As of 2009, PepsiCo pays a quarterly dividend on its stock. The dividend has historically been adjusted in May. The company paid a 14-cent-per-share quarterly dividend in February of 2001. The dividend was increased to 14.5 cents in May, 2001, 15 cents in May, 2002, 16 cents in May 2003, 23 cents, in May 2004, 26 cents in May 2005, 30 cents in May 2006, 37.5 cents in May 2007, 42.5 cents in May 2008, and 45 cents in May 2009.