Pepsi to buy Rockstar for $3.85 billion
PepsiCo, Inc. (Pepsi) has announced that subject to customary closing conditions, including regulatory approval, it has agreed to acquire energy drink maker Rockstar Energy Beverages for $3.85 billion.
The transaction is projected to close in the first half of the current year.
In addition to agreeing to buy the 19-year-old company, Pepsi also entered into an agreement, which will provide about $0.7 billion of payments linked to future tax advantages connected with the transaction, to be paid in up to 15 years.
Pepsi chairman and CEO Ramon Laguarta 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.”
He added, “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.”
Based in Las Vegas, Rockstar produces beverages in more than 30 flavors. The company’s drinks are available at grocery and convenience stores in more than 30 countries. Rockstar and Pepsi have had a distribution contract in North America since 2009.
Russ Weiner, Rockstar’s founder and creator of the world’s first 16oz energy drink, commented on the occasion, “We have had a strong partnership with PepsiCo for the last decade, and I’m happy to take that to the next level and join forces as one company.”
He added, “PepsiCo shares our competitive spirit and will invest in growing our brand even further. I’m proud of what we built and how we’ve changed the game in the energy space.”
Other than Rockstar, Pepsi’s energy portfolio has Mountain Dew’s Kickstart, GameFuel, and AMP in it.
Pepsi says it does not anticipate that the transaction would be material to its earnings or revenue per share in the current year.
Image via the Media Resources page of Pepsi's website
