PepsiCo Boosts Stake In Celsius In $585 Mln Deal To Strengthen Long-term Strategic Partnership

Celsius Holdings

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(RTTNews) - Beverage company Celsius Holdings, Inc. (CELH) and PepsiCo, Inc. (PEP) announced Friday an agreement for PepsiCo to increase its stake in Celsius to strengthen their long-term strategic partnership.

As part of the agreement, Celsius Holdings' Alani Nu brand will move into the PepsiCo distribution system in the U.S. and Canada/

PepsiCo has also acquired $585 million in newly issued convertible 5% preferred stock while extending its existing preferred stock to the same conversion period. Further, Celsius has acquired the Rockstar Energy brand in the U.S. and Canada from PepsiCo.

However, PepsiCo will continue to own the Rockstar Energy brand internationally. Celsius Holdings will become the PepsiCo strategic energy lead in the U.S., managing the CELSIUS, Alani Nu and Rockstar Energy brands. PepsiCo will lead distribution for the Celsius Holdings portfolio in the U.S. and Canada.

Under this deal, PepsiCo's ownership in Celsius Holdings increased to approximately 11% on an as-converted basis, and PepsiCo will nominate an additional director to serve on Celsius Holdings' board of directors.

This agreement leverages the respective strengths of Celsius Holdings and PepsiCo to scale the combined energy drink portfolio with a more unified commercial strategy.