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PepsiCo to acquire Rockstar Energy Beverages for $3.85 billion

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March 11, 2020

PepsiCo, Inc. entered a deal to acquire Rockstar Energy Beverages for $3.85 billion, according to a press release.

Rockstar, founded in 2001, produces beverages that are designed for those who lead active lifestyles from athletes to rock stars. Rockstar 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. 

"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," PepsiCo Chairman and CEO Ramon Laguarta said in the press release. "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."

PepsiCo will provide approximately $0.7 billion of payments related to future tax benefits associated with the transaction, payable over up to 15 years. PepsiCo does not expect the transaction to be material to its revenue or earnings per share in 2020. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in the first half of 2020.