Was drinking Pure Leaf tea and saw that it was owned by Pepsi. Why don’t they call it Pepsi tea?
In: Economics
Companies, particularly publicly traded companies, are always striving for growth. They can generally do this one of two ways: invest in R&D, new technology, new equipment or processes, and the like; or they can skip all the work involved with coming up with something new, and just acquire a smaller company whose already done all that work. So in your example, Pepsi probably didn’t have a successful tea product line so they did a bunch if research of who was out there, found True Leaf and liked what they saw, and approached them to purchase them. The previous owner gets a check (or maintains some smaller percentage of ownership, etc.) and Pepsi gets to grow that brand and take all future revenue under their big umbrella of brands.
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