content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
  
  
  
  
  
  
                                      FORM 8-K
  
  
  
  
  
                                   CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(D) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
  
  
  
  
  
                 May 2, 2002                               1-14893
          ------------------------               ----------------------------
          Date of Report (Date of                   Commission File Number
          earliest event reported)
  
  
  
  
  
                           THE PEPSI BOTTLING GROUP, INC.
               (Exact name of registrant as specified in its charter)
  
  
  
  
  
                  Delaware                                13-4038356
     ---------------------------------              ------------------------
      (State or other jurisdiction of                  (I.R.S. Employer
       incorporation or organization)                Identification Number)
  
  
  
  
                                   One Pepsi Way
                               Somers, New York 10589
          ----------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
  
  
  
                                   (914) 767-6000
          ----------------------------------------------------------------
                (Registrant's telephone number, including area code)
  
  
  <PAGE>
  
  
  
  Item 5.  Other Events.
  
            On MAY 7, 2002, The Pepsi Bottling Group, Inc. ("PBG") issued a press
  release announcing that it had reached a non-binding agreement with PepsiCo,
  Inc. and Mr. Enrique C. Molina Sobrino ("Mr. Molina"), the two principal
  shareholders of Pepsi-Gemex S.A. de C.V. ("Pepsi-Gemex"), regarding the possible
  acquisition of all of the outstanding shares of Pepsi-Gemex. The press release
  is filed as Exhibit 99.1 hereto, and is incorporated herein by reference. The
  non-binding agreement is reflected in a term sheet, a copy of which is filed as
  Exhibit 99.2 hereto, and is incorporated herein by reference. PBG and Mr. Molina
  have entered into a confidentiality agreement, dated May 3, 2002, in which each
  party agreed to keep confidential all non-public information of the other party
  to which it is given access.
  
  Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.
  
  (a)      Not applicable.
  
  (b)      Not applicable.
  
  (c)      Exhibit 99.1    Press release dated May 7, 2002.
  
           Exhibit 99.2    Non-Binding Term Sheet.
  
  
  
  
  <PAGE>
  
  
  
                                     SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
  Date: May 7, 2002                        THE PEPSI BOTTLING GROUP, INC.
  
  
  
  
                                           By: /s/ Pamela C. McGuire
                                               ---------------------------
                                               Pamela C. McGuire
                                               Senior Vice President,
                                               General Counsel and Secretary
  
  
  <PAGE>
  
  
  
                                                                      Exhibit 99.2
  
                                                            Non-Binding Term Sheet
                                                            ----------------------
  
                            SANTA FE TERMS AND CONDITIONS
                            -----------------------------
  
  
  Proposal                   The Pepsi Bottling Group ("PBG") proposes to purchase
                             100% of the shares of Pepsi-Gemex, S.A. DE C.V.
                             (Gemex), including all shares subject to Gemex
                             options, through public tender offers in the United
                             States and Mexico.
  
  --------------------------------------------------------------------------------
  
  Gross Enterprise Value     The gross enterprise value for Gemex will be, in the
                             aggregate, equal to 11,903,650,000 Mexican Pesos.
  
  --------------------------------------------------------------------------------
  
  Adjustments to Gross       The peso equivalent of the gross enterprise value of
  Enterprise Value           Gemex ("EV") will be adjusted for (A) Working
                             Capital, (B) Net Debt, (C) Identified Due Diligence
                             Liabilities, and (D) Conduct of Business in the
                             Ordinary Course ("Adjusted EV") prior to calculating
                             the price per share to be offered to Gemex
                             shareholders in the Tender Offers. Any U.S. Dollar
                             denominated adjustments shall be converted into
                             Mexican Pesos calculated on the basis of the average
                             spot exchange rate for the 5 day period prior to the
                             commencement of the Tender Offers.
  
  --------------------------------------------------------------------------------
  
  Net Working Capital        Immediately prior to the commencement of the Tender
                             Offers, the EV will be increased or decreased, on a
                             peso-for-peso basis, to the extent that the Net
                             Working Capital of Gemex on such date is greater or
                             less than a normalized level of Net Working Capital
                             agreed upon by Enrique Molina (the "Seller") and PBG.
                             Net Working Capital will be defined as accounts
                             receivable, inventories, prepaid expenses (but not
                             cash) less accounts payable and accrued expenses and
                             taxes payable (i.e. current assets, other than cash,
                             less current liabilities)
  
  --------------------------------------------------------------------------------
  
  Net Debt                   Immediately prior to the commencement of the Tender
                             Offers, the EV will be decreased, on a peso-for-peso
                             basis, to the extent that (A) the amount of all short
                             term debt and long-term indebtedness of Gemex,
                             including any premium resulting from any
                             change-in-control provision contained in such
                             indebtedness, (B) the amount of any current portion
                             of such indebtedness, and (C) any amounts due for
                             unpaid dividends declared minus any cash in the
                             business exceeds 0 Mexican Pesos.
  
  --------------------------------------------------------------------------------
  
  
  
  <PAGE>
  
  
  
  Identified Due Diligence   PBG will undertake a comprehensive due diligence
  Liabilities                investigation and review and will quantify the any
                             amount of liabilities not included or reserved for in
                             the financial statements of Gemex used to determine
                             the EV. Immediately prior to the commencement of the
                             Tender Offers, the EV will be decreased, on a
                             peso-for-peso basis, in the amount of any such
                             identified liabilities.
  
  --------------------------------------------------------------------------------
  
  Conduct of Business in     PBG will assess whether Gemex has conducted its
  the Ordinary Course        business in the ordinary course for the period
                             beginning on January 1, 2002 through the date
                             immediately preceding the commencement of the Tender
                             Offers and will quantify the impact of any failure to
                             conduct its business in the ordinary course. For
                             example, PBG will assess whether Gemex has made
                             investments in capital items (such as marketing
                             equipment) and expenditures for repairs and
                             maintenance on a basis consistent with reasonable
                             business judgment and past practice prior to January
                             1, 2002. Immediately prior to the commencement of the
                             Tender Offers, the EV will be decreased, on a
                             peso-for-peso basis, in the amount of such impact.
  
  --------------------------------------------------------------------------------
  Seller's Existing          PBG acknowledges that the Seller is entitled to a
  Pension and                lump-sum payment of approximately 141,150,000 Mexican
  Termination Benefits       Pesos upon his resignation from Gemex.
  
  --------------------------------------------------------------------------------
  Tender Offer Price         The price per share offered to Gemex shareholders
  Per Share                  in the public Tender Offers will be calculated by
                             dividing the Adjusted EV minus 329,350,000 by the
                             number of Gemex shares outstanding. In addition the
                             shareholders of Gemex other than PepsiCo, Inc. will
                             receive an incremental amount equal to 329,350,000
                             divided by the number of Gemex shares outstanding
                             other than the shares held by PepsiCo. The Mexican
                             Tender Offer price per share will be denominated in
                             Mexican Pesos. The U.S. Tender Offer price per share
                             will be dnominated in U.S. Dollars equivalent to the
                             Peso denominated tender offer price per share,
                             calculated on the basis of the average spot exchange
                             rate effective for the 5 day period prior to the
                             commencement of the Tender Offers.
  
  --------------------------------------------------------------------------------
  
  Seller's Participation     Seller will agree to participate in the Tender Offers
  Agreement                  with respect to all shares owned by the Seller
                             directly or indirectly.
  
  --------------------------------------------------------------------------------
  
  Representations            Seller will represent and warrant with respect to
  and Warranties             undisclosed liabilities of Gemex to companies and
                             individuals affiliated with Seller.
  
  --------------------------------------------------------------------------------
  
  
  
                                         2
  
  
  <PAGE>
  
  
  
  Indemnity                  Seller will fully indemnify PBG for breach of any
                             such representations and warranties and will
                             reimburse PBG for the cost to terminate transactions
                             with affiliates that are on terms less favorable to
                             Gemex than arms-length transactions ("Affiliate
                             Termination Costs"). The Seller will deposit
                             188,200,000 Mexican Pesos from the proceeds of the
                             Tender Offers into an escrow account for purposes of
                             securing PBG's indemnification claims in respect of
                             Seller's representations and warranties (the "Escrow
                             Deposit"). The Escrow Deposit will be invested in
                             U.S. treasuries with appropriate maturities and shall
                             be paid out over a three year period, subject to
                             outstanding claims. Interest earned on the Escrow
                             Deposit will be payable to the Seller. Seller's
                             liability for breaches of representations and
                             warranties, indemnification obligations and liability
                             for Affiliate Termination Costs will be capped at the
                             amount of the Escrow Deposit.
  
  --------------------------------------------------------------------------------
  
  Timing/Due Diligence       PBG will provide Gemex with a due diligence request
                             list as soon as practicable. PBG will use its best
                             efforts to complete its due diligence review within 8
                             weeks from the date on which PBG provides Gemex with
                             such list (assuming Gemex fully responds to the due
                             diligence request list within 1 week). The period of
                             due diligence review may be extended by mutual
                             agreement of the parties. The due diligence request
                             list will include items such as: (A) Human
                             Resources/Compensation and Benefits, (B) Risk
                             Management, (C) Real Estate, (D) Environmental, (E)
                             General Accounting, (F) Tax, (G) Information Systems,
                             (H) Cash Management Review, (I) Legal and (J)
                             Manufacturing and Warehousing.
  
  --------------------------------------------------------------------------------
  
  Transaction Costs          Each party will bear the transaction costs and
                             transaction-related tax costs incurred by them.
                             Transaction costs will include but not be limited to
                             legal, tax, accounting and investment banking fees
                             and costs related to the Tender Offers.
  
  --------------------------------------------------------------------------------
  
  Conditions of Closing      Due Diligence satisfactory to PBG, PBG Board of
                             Director approval, governmental approvals, no
                             Material Adverse Change, no material breach of
                             representations and warranties, etc.
  
  --------------------------------------------------------------------------------
  
  Confidentiality            Seller and PBG agree that the information contained
                             in this term sheet is confidential and neither will
                             disclose it to anyone other than their respective
                             financial, legal, tax and accounting advisors who
                             also will keep the information confidential unless
                             otherwise required by law.
  
  --------------------------------------------------------------------------------
  
  
  May 7, 2002                            3
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metadata_filer: {"company-data": {"conformed-name": "PEPSI BOTTLING GROUP INC", "cik": "0001076405", "assigned-sic": "2080", "irs-number": "134038356", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-14893", "film-number": "02637117"}, "business-address": {"street1": "ONE PEPSI WAY", "city": "SOMERS", "state": "NY", "zip": "10589-2201", "phone": "9147676000"}, "mail-address": {"street1": "ONE PEPSI WAY", "city": "SOMERS", "state": "NY", "zip": "10589-2201"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(D) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
  
                 May 2, 2002                               1-14893
          ------------------------               ----------------------------
          Date of Report (Date of                   Commission File Number
          earliest event reported)
  
                           THE PEPSI BOTTLING GROUP, INC.
               (Exact name of registrant as specified in its charter)
  
                  Delaware                                13-4038356
     ---------------------------------              ------------------------
      (State or other jurisdiction of                  (I.R.S. Employer
       incorporation or organization)                Identification Number)
  
                                   One Pepsi Way
                               Somers, New York 10589
          ----------------------------------------------------------------
                 (Address of Principal Executive Offices) (Zip Code)
  
                                   (914) 767-6000
          ----------------------------------------------------------------
                (Registrant's telephone number, including area code)
  Item 5.  Other Events.
  
            On MAY 7, 2002, The Pepsi Bottling Group, Inc. ("PBG") issued a press
  release announcing that it had reached a non-binding agreement with PepsiCo,
  Inc. and Mr. Enrique C. Molina Sobrino ("Mr. Molina"), the two principal
  shareholders of Pepsi-Gemex S.A. de C.V. ("Pepsi-Gemex"), regarding the possible
  acquisition of all of the outstanding shares of Pepsi-Gemex. The press release
  is filed as Exhibit 99.1 hereto, and is incorporated herein by reference. The
  non-binding agreement is reflected in a term sheet, a copy of which is filed as
  Exhibit 99.2 hereto, and is incorporated herein by reference. PBG and Mr. Molina
  have entered into a confidentiality agreement, dated May 3, 2002, in which each
  party agreed to keep confidential all non-public information of the other party
  to which it is given access.
  
  Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.
  
  (a)      Not applicable.
  
  (b)      Not applicable.
  
  (c)      Exhibit 99.1    Press release dated May 7, 2002.
  
           Exhibit 99.2    Non-Binding Term Sheet.
  SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
  Date: May 7, 2002                        THE PEPSI BOTTLING GROUP, INC.
  
                                           By: /s/ Pamela C. McGuire
                                               ---------------------------
                                               Pamela C. McGuire
                                               Senior Vice President,
                                               General Counsel and Secretary
  Exhibit 99.2
  
                                                            Non-Binding Term Sheet
                                                            ----------------------
  
                            SANTA FE TERMS AND CONDITIONS
                            -----------------------------
  
  Proposal                   The Pepsi Bottling Group ("PBG") proposes to purchase
                             100% of the shares of Pepsi-Gemex, S.A. DE C.V.
                             (Gemex), including all shares subject to Gemex
                             options, through public tender offers in the United
                             States and Mexico.
  
  --------------------------------------------------------------------------------
  
  Gross Enterprise Value     The gross enterprise value for Gemex will be, in the
                             aggregate, equal to 11,903,650,000 Mexican Pesos.
  
  --------------------------------------------------------------------------------
  
  Adjustments to Gross       The peso equivalent of the gross enterprise value of
  Enterprise Value           Gemex ("EV") will be adjusted for (A) Working
                             Capital, (B) Net Debt, (C) Identified Due Diligence
                             Liabilities, and (D) Conduct of Business in the
                             Ordinary Course ("Adjusted EV") prior to calculating
                             the price per share to be offered to Gemex
                             shareholders in the Tender Offers. Any U.S. Dollar
                             denominated adjustments shall be converted into
                             Mexican Pesos calculated on the basis of the average
                             spot exchange rate for the 5 day period prior to the
                             commencement of the Tender Offers.
  
  --------------------------------------------------------------------------------
  
  Net Working Capital        Immediately prior to the commencement of the Tender
                             Offers, the EV will be increased or decreased, on a
                             peso-for-peso basis, to the extent that the Net
                             Working Capital of Gemex on such date is greater or
                             less than a normalized level of Net Working Capital
                             agreed upon by Enrique Molina (the "Seller") and PBG.
                             Net Working Capital will be defined as accounts
                             receivable, inventories, prepaid expenses (but not
                             cash) less accounts payable and accrued expenses and
                             taxes payable (i.e. current assets, other than cash,
                             less current liabilities)
  
  --------------------------------------------------------------------------------
  
  Net Debt                   Immediately prior to the commencement of the Tender
                             Offers, the EV will be decreased, on a peso-for-peso
                             basis, to the extent that (A) the amount of all short
                             term debt and long-term indebtedness of Gemex,
                             including any premium resulting from any
                             change-in-control provision contained in such
                             indebtedness, (B) the amount of any current portion
                             of such indebtedness, and (C) any amounts due for
                             unpaid dividends declared minus any cash in the
                             business exceeds 0 Mexican Pesos.
  
  --------------------------------------------------------------------------------
  Identified Due Diligence   PBG will undertake a comprehensive due diligence
  Liabilities                investigation and review and will quantify the any
                             amount of liabilities not included or reserved for in
                             the financial statements of Gemex used to determine
                             the EV. Immediately prior to the commencement of the
                             Tender Offers, the EV will be decreased, on a
                             peso-for-peso basis, in the amount of any such
                             identified liabilities.
  
  --------------------------------------------------------------------------------
  
  Conduct of Business in     PBG will assess whether Gemex has conducted its
  the Ordinary Course        business in the ordinary course for the period
                             beginning on January 1, 2002 through the date
                             immediately preceding the commencement of the Tender
                             Offers and will quantify the impact of any failure to
                             conduct its business in the ordinary course. For
                             example, PBG will assess whether Gemex has made
                             investments in capital items (such as marketing
                             equipment) and expenditures for repairs and
                             maintenance on a basis consistent with reasonable
                             business judgment and past practice prior to January
                             1, 2002. Immediately prior to the commencement of the
                             Tender Offers, the EV will be decreased, on a
                             peso-for-peso basis, in the amount of such impact.
  
  --------------------------------------------------------------------------------
  Seller's Existing          PBG acknowledges that the Seller is entitled to a
  Pension and                lump-sum payment of approximately 141,150,000 Mexican
  Termination Benefits       Pesos upon his resignation from Gemex.
  
  --------------------------------------------------------------------------------
  Tender Offer Price         The price per share offered to Gemex shareholders
  Per Share                  in the public Tender Offers will be calculated by
                             dividing the Adjusted EV minus 329,350,000 by the
                             number of Gemex shares outstanding. In addition the
                             shareholders of Gemex other than PepsiCo, Inc. will
                             receive an incremental amount equal to 329,350,000
                             divided by the number of Gemex shares outstanding
                             other than the shares held by PepsiCo. The Mexican
                             Tender Offer price per share will be denominated in
                             Mexican Pesos. The U.S. Tender Offer price per share
                             will be dnominated in U.S. Dollars equivalent to the
                             Peso denominated tender offer price per share,
                             calculated on the basis of the average spot exchange
                             rate effective for the 5 day period prior to the
                             commencement of the Tender Offers.
  
  --------------------------------------------------------------------------------
  
  Seller's Participation     Seller will agree to participate in the Tender Offers
  Agreement                  with respect to all shares owned by the Seller
                             directly or indirectly.
  
  --------------------------------------------------------------------------------
  
  Representations            Seller will represent and warrant with respect to
  and Warranties             undisclosed liabilities of Gemex to companies and
                             individuals affiliated with Seller.
  
  --------------------------------------------------------------------------------
  
                                         2
  Indemnity                  Seller will fully indemnify PBG for breach of any
                             such representations and warranties and will
                             reimburse PBG for the cost to terminate transactions
                             with affiliates that are on terms less favorable to
                             Gemex than arms-length transactions ("Affiliate
                             Termination Costs"). The Seller will deposit
                             188,200,000 Mexican Pesos from the proceeds of the
                             Tender Offers into an escrow account for purposes of
                             securing PBG's indemnification claims in respect of
                             Seller's representations and warranties (the "Escrow
                             Deposit"). The Escrow Deposit will be invested in
                             U.S. treasuries with appropriate maturities and shall
                             be paid out over a three year period, subject to
                             outstanding claims. Interest earned on the Escrow
                             Deposit will be payable to the Seller. Seller's
                             liability for breaches of representations and
                             warranties, indemnification obligations and liability
                             for Affiliate Termination Costs will be capped at the
                             amount of the Escrow Deposit.
  
  --------------------------------------------------------------------------------
  
  Timing/Due Diligence       PBG will provide Gemex with a due diligence request
                             list as soon as practicable. PBG will use its best
                             efforts to complete its due diligence review within 8
                             weeks from the date on which PBG provides Gemex with
                             such list (assuming Gemex fully responds to the due
                             diligence request list within 1 week). The period of
                             due diligence review may be extended by mutual
                             agreement of the parties. The due diligence request
                             list will include items such as: (A) Human
                             Resources/Compensation and Benefits, (B) Risk
                             Management, (C) Real Estate, (D) Environmental, (E)
                             General Accounting, (F) Tax, (G) Information Systems,
                             (H) Cash Management Review, (I) Legal and (J)
                             Manufacturing and Warehousing.
  
  --------------------------------------------------------------------------------
  
  Transaction Costs          Each party will bear the transaction costs and
                             transaction-related tax costs incurred by them.
                             Transaction costs will include but not be limited to
                             legal, tax, accounting and investment banking fees
                             and costs related to the Tender Offers.
  
  --------------------------------------------------------------------------------
  
  Conditions of Closing      Due Diligence satisfactory to PBG, PBG Board of
                             Director approval, governmental approvals, no
                             Material Adverse Change, no material breach of
                             representations and warranties, etc.
  
  --------------------------------------------------------------------------------
  
  Confidentiality            Seller and PBG agree that the information contained
                             in this term sheet is confidential and neither will
                             disclose it to anyone other than their respective
                             financial, legal, tax and accounting advisors who
                             also will keep the information confidential unless
                             otherwise required by law.
  
  --------------------------------------------------------------------------------
  
  May 7, 2002                            3