PepsiCo Buys More of Celsius, Strengthens Their Long-Term Partnership

PepsiCo and Celsius Holdings have altered their partnership agreement with three key components: PepsiCo will buy another $585 million of newly issued Celsius stock, PepsiCo will hand over to Celsius its Rockstar Energy brand in the U.S. and Canada and Celsius will move its recently acquired Alani Nu energy brand into the PepsiCo distribution system in the U.S. and Canada.

Restated, as they put in today’s release, Celsius Holdings will become the PepsiCo strategic energy lead in the U.S., managing the Celsius, Alani Nu and Rockstar Energy brands, while PepsiCo will lead distribution for the Celsius Holdings portfolio in the U.S. and Canada.

With this deal, PepsiCo’s ownership in Celsius Holdings increased to approximately 11%, and PepsiCo will nominate an additional director to serve on Celsius Holdings’ board of directors, “further strategically aligning both companies for the long-term,” the announcement said. “This agreement leverages the respective strengths of Celsius Holdings and PepsiCo to scale the combined energy drink portfolio with a more unified commercial strategy.”

“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,” said John Fieldly, chairman and CEO of Celsius Holdings. “Together, we will reach more people, in more places, more often, with a total energy portfolio that offers options for every consumer and creates greater value for all our stakeholders.”

Ram Krishnan, CEO of PepsiCo Beverages U.S., 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. This transaction creates an aligned incentive structure for both parties to bring their individual expertise to better compete in the energy category.”

Alani Nu was the top-selling new product of 2022-2023, according to Circana’s annual New Product Pacesetters list. Celsius acquired the competing brand early this year for $1.65 billion.