PepsiCo, Inc. (NASDAQ: PEP) is to acquire Rockstar Energy Beverages, an energy drink maker, for $3.85 billion.
The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in the first half of 2020. PepsiCo has also entered into an agreement, which will provide approximately $0.7 billion of payments related to future tax benefits associated with the transaction, payable over up to 15 years.
Founded in 2001, Rockstar produces beverages designed for those who lead active lifestyles from athletes to rock stars. Products are available in over 30 flavors at convenience and grocery outlets in over 30 countries. PepsiCo has had a distribution agreement with Rockstar in North America since 2009. In addition to Rockstar, PepsiCo’s energy portfolio includes Mountain Dew’s Kickstart, GameFuel, and AMP.
Led by Chairman and CEO Ramon Laguarta, PepsiCo generated more than $67 billion in net revenue in 2019, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. The company’s product portfolio includes a wide range of foods and beverages, including 23 brands that generate more than $1 billion each in estimated annual retail sales.