PepsiCo to Spin Off Juice Business

Aug. 3, 2021
PepsiCo is selling its juice business, including Tropicana and Simply Naked, to a private equity firm in a deal valued at $4.5 billion.

PepsiCo is selling its juice business, including Tropicana and Simply Naked, to a private equity firm in a deal valued at $4.5 billion.

The majority stake in the business will be sold to private equity firm PAI Partners. The deal will leave PepsiCo with a 39% share of the business and exclusive U.S. distribution rights.

The move is seen as a way for PepsiCo to divest a business with little growth potential, as consumers move away from sugar-heavy drinks. Sales of Tropicana, the No. 1 refrigerated juice brand, rose during the pandemic to about $3 billion last year, but profit margins were below PepsiCo’s other product categories, according to the Wall Street Journal. Juice in general has been declining, and PepsiCo’s juice sales fell 36% by volume since 2011, to 436 million gallons.

PAI Partners specializes in investments in high-profile brands, sometimes partnering with the brand owner. It made such a deal for Nestlé’s ice cream brands, buying its European business in 2016 and North American business in 2019 and forming a joint venture with Nestlé.

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