:max_bytes(150000):strip_icc()/GettyImages-2205568557-a8dcf8528ea24aacbd9e226958bed662.jpg "PepsiCo Leans More Into Energy Drinks With 5M Celsius Stake")
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KEY TAKEAWAYS
- PepsiCo is leaning further into energy drinks, increasing its stake in Celsius Holdings to 11% in a $585 million deal.
- PepsiCo will distribute Celsius’ “female-focused” Alani Nu brand in the U.S. and Canada, while Celsius has bought the Rockstar Energy brand in the U.S. and Canada from the maker of Doritos and Pepsi soda.
- Celsius shares are rising in early trading Friday on the back of the PepsiCo stake purchase.
PepsiCo (PEP) is leaning further into energy drinks, increasing its stake in Celsius Holdings (CELH) to 11% in a $585 million deal.
The news sent shares of Celsius up 4% in early trading Friday, bringing their year-to-date gains to 140%.
As part of a deal the two have struck, PepsiCo has bought $585 million in newly issued convertible preferred shares in Celsius and extended its existing preferred shares. PepsiCo will distribute Celsius’ “female-focused” Alani Nu brand in the U.S. and Canada, while Celsius has bought the Rockstar Energy brand in the U.S. and Canada from the maker of Doritos and Pepsi soda.
PepsiCo will nominate an additional director to Celsius’s board and continue to own the Rockstar Energy brand internationally.
The deal “marks the next step in PepsiCo reshaping its brand portfolio,” PepsiCo CEO Ram Krishnan said. “Energy is an important growth category, and we believe this move with our partner Celsius creates a stronger multi-brand energy portfolio that is better positioned to serve different consumer cohorts.”
Shares in PepsiCo, whose other sports drinks include Gatorade, are little changed in early trading Friday and have lost 3% of their value so far this year.
