PepsiCo to acquire energy drink Rockstar for $3.85bn
Rockstar was founded in 2001 and produces drinks “for those who lead active lifestyles from athletes to rock stars.”
Its products are available in 30 flavors at convenience and grocery outlets in more than 30 countries. PepsiCo already has had a distribution agreement with Rockstar in North America, which has been in place since 2009.
PepsiCo: Energy is a highly profitable category
Beverage and snack giant PepsiCo – whose beverage brands include Pepsi, Tropicana and Gatorade – already has an energy portfolio including Mountain Dew's Kickstart, GameFuel, and AMP.
Ramon Laguarta, PepsiCo Chairman and CEO, said: "As we work to be more consumer-centric and capitalize on rising demand in the functional beverage space, this highly strategic acquisition will enable us to leverage PepsiCo's capabilities to both accelerate Rockstar's performance and unlock our ability to expand in the category with existing brands such as Mountain Dew.
"Over time, we expect to capture our fair share of this fast-growing, highly profitable category and create meaningful new partnerships in the energy space."
PepsiCo has also entered into an agreement, which will provide approximately $0.7bn of payments related to future tax benefits associated with the transaction, payable over up to 15 years. PepsiCo does not expect the transaction to be material to its revenue or earnings per share in 2020.
The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in the first half of 2020.