Despite a decline in revenue, the company invested $1.8 billion to acquire Celsius (CELH.US), resulting in its shares soaring after hours, challenging Red Bull's dominance.

Celsius Holdings (CELH.US) has announced its acquisition of Alani Nu, a competitor in the energy drink industry, for $1.8 billion in cash and stock, including $150 million in tax assets. The acquisition news sent Celsius' stock soaring more than 35% in after-hours trading.The transaction is expected to be completed in the second quarter of 2025, according to reports. Notably, Celsius' recent revenue growth has slowed, including both quarters of the past year seeing year-over-year declines. This slowdown is partly attributed to the rise of emerging brands like Alani Nu, which was founded in 2018 by social media influencer Katie Hearn and focuses on attracting young female consumers, claiming to be a healthy alternative to traditional sugar-laden energy drinks.The two companies were optimistic in a joint statement: "With the addition of Alani Nu, the combined Celsius platform is expected to generate approximately $2 billion in sales." However, Celsius faces challenges from major competitor Red Bull, particularly as Red Bull continues to launch more sugar-free flavors, which poses a significant threat, as noted by Jefferies analyst Kaumil Gajrawala in a report on Wednesday.Celsius' stock has plunged 73% from its high in March 2024, as competition intensifies and its main U.S. distributor, PepsiCo, reduced Celsius' inventory last year. More notably, about 22% of its shares were shorted as of the end of January.Specifically, Celsius will pay $1.275 million in cash, take on $25 million in profit expenses, and issue $500 million in new restricted common stock.In addition, Celsius released its fourth-quarter earnings report on Thursday, showing a 4.4% year-over-year decline in revenue to $332 million, but still above analysts' expectations of $325.5 million.