Celsius Holdings acquires Rockstar Energy from PepsiCo for $585M

Celsius Holdings Inc. (NASDAQ: CELH) and PepsiCo Inc. (NASDAQ: PEP) announced an agreement that expands their strategic partnership, with Celsius acquiring the Rockstar Energy brand in the U.S. and Canada from PepsiCo.

Under the agreement, PepsiCo acquired $585 million in newly issued convertible 5% preferred stock from Celsius Holdings while extending its existing preferred stock to the same conversion period. PepsiCo's ownership in Celsius increased to approximately 11% on an as-converted basis.

Celsius Holdings' Alani Nu brand will move into PepsiCo's distribution system in the U.S. and Canada. PepsiCo will continue to own the Rockstar Energy brand internationally and will handle distribution for all three energy drink brands - CELSIUS, Alani Nu and Rockstar Energy - in the U.S. and Canada.

The transaction designates Celsius Holdings as PepsiCo's strategic energy lead in the U.S., managing the combined energy portfolio. PepsiCo will nominate an additional director to serve on Celsius Holdings' board of directors.

"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," said John Fieldly, Chairman and CEO of Celsius Holdings.

Ram Krishnan, CEO of PepsiCo Beverages U.S., stated the agreement "marks the next step in PepsiCo reshaping its brand portfolio to position us for long-term growth."

The companies expect the arrangement to expand Alani Nu's retail availability through PepsiCo's distribution network, including foodservice and other channels. Celsius Holdings hosted a webcast to discuss the transaction details with investors.

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