PepsiCo Expands Stake in Celsius, Acquires Rockstar Energy in US and Canada

Celsius is acquiring the Rockstar Energy brand in the U.S. and Canada from PepsiCo as part of a partnership expansion. PepsiCo is increasing its stake in Celsius to 11% for $585 million, while Celsius's Alani Nu brand will be distributed by PepsiCo in the U.S. and Canada. Celsius will manage the Celsius, Alani Nu, and Rockstar Energy brands, while PepsiCo will handle distribution in the U.S. and Canada.

PepsiCo Inc. and Celsius Holdings Inc. have announced a significant expansion of their partnership, with Celsius acquiring the Rockstar Energy brand in the U.S. and Canada and PepsiCo increasing its stake in Celsius to 11% for $585 million. The deal, which was reported on Friday, is expected to enhance both companies' positions in the energy drink market [1].

Under the new agreement, Celsius will manage the Celsius, Alani Nu, and Rockstar Energy brands, while PepsiCo will handle distribution for these brands in the U.S. and Canada. This arrangement aims to create a unified commercial strategy, streamline planograms, prioritize SKUs, and expand geographic reach across retail and foodservice channels [2].

The acquisition of Rockstar Energy will allow Celsius to offer traditional energy drink formats, complementing its modern positioning of Celsius and Alani Nu. Celsius CEO John Fieldly stated, "Stepping into the role of PepsiCo’s strategic energy drink captain in the U.S. is expected to be a pivotal milestone in our journey to shape the future of modern energy and grow our brands within a leading beverage distribution system" [3].

PepsiCo CEO Ram Krishnan added, "This agreement marks the next step in PepsiCo reshaping its brand portfolio to position us for long-term growth. 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" [3].

The deal also involves PepsiCo appointing an additional director to the Celsius board, reflecting the increased strategic importance of the partnership. The initial investment by PepsiCo in 2022 gave the beverage giant an 8.5% stake in Celsius through preferred stock, which has now been increased to approximately 11% on an as-converted basis [1].

References:
[1] https://www.investing.com/news/stock-market-news/pepsico-increases-stake-in-celsius-holdings-adds-rockstar-deal--report-93CH-4216339
[2] https://www.foodbev.com/news/pepsico-boosts-stake-in-celsius-with-585m-deal
[3] https://seekingalpha.com/news/4490382-win-win-celsius-becomes-pepsicos-energy-drink-captain-in-the-us-as-part-of-an-expansive-deal