PepsiCo to increase ownership in Celsius with $585M deal: report
News Summary
PepsiCo Inc. is reportedly investing $585 million in Celsius Holdings Inc., increasing its ownership stake to 11% to deepen its presence in the rapidly growing functional beverage market. The transaction extends the conversion period for PepsiCo's initial 2022 investment and grants PepsiCo the right to nominate an additional director to Celsius' board, solidifying its influence. As part of the agreement, Celsius will acquire PepsiCo's Rockstar Energy brand in the United States and Canada, becoming PepsiCo's strategic energy lead in the U.S., overseeing Celsius, Alani Nu, and Rockstar Energy. Concurrently, PepsiCo will take the lead on distributing Celsius' portfolio, including its recently acquired Alani Nu, across the U.S., leveraging its extensive network to accelerate market penetration and growth. This move underscores PepsiCo's strategy to adapt to evolving consumer health preferences and strengthen its foothold in the energy drink segment.
Background
PepsiCo first invested in Celsius in 2022, acquiring an 8.5% stake for $550 million, marking its initial foray into the functional beverage market. Founded in 2004, Celsius has experienced rapid growth in recent years, driven by consumer enthusiasm for its vitamin-infused drinks marketed for calorie-burning and performance enhancement, consistently surpassing Wall Street expectations. This deepened partnership is part of PepsiCo's broader strategy to pivot towards healthier, less processed products, responding to shifting consumer preferences and the booming functional beverage market.
In-Depth AI Insights
What is the deeper significance of PepsiCo's move for its overall beverage strategy? - This is not just an increased investment in a high-growth brand, but a crucial step in PepsiCo's