PepsiCo to pay $550m for 8.5% stake in Celsius

 

Bloomberg

PepsiCo Inc will pay $550 million for a stake in fitness-energy drink maker Celsius Holdings Inc as part of a long-term strategic distribution agreement.
PepsiCo is getting convertible preferred stock equating to 8.5% ownership in Celsius, the companies said in a statement. The soft drink giant will become the preferred distribution partner globally for Celsius and will also nominate a director to serve on its board.
Shares of Celsius jumped as much as 16% in New York. The stock had been climbing recently amid analyst speculation that PepsiCo could switch to Celsius after ending a distribution pact with Bang Energy. That partnership, struck in 2020, came undone amid disputes and lawsuits. PepsiCo rose 1.2% in New York.
Celsius, founded in 2004, has seen fast growth for its low-sodium, vitamin-infused beverages that help burn calories.
PepsiCo also owns the popular Gatorade sports drink brand. In 2019, PepsiCo acquired CytoSport, which makes Muscle Milk and Evolve protein brands.
PepsiCo’s stake in Celsius “may be an initial step towards full ownership,” Bloomberg Intelligence analyst Kenneth Shea wrote. Together, the two companies can claim a greater share of the $18 billion US energy-drink market, he said.
Last month, PepsiCo raised its sales forecast for the second time this year, saying volumes have held up well despite decades-high inflation.

Leave a Reply

Send this to a friend