Energy Drink Deal: PepsiCo (PEP) to Acquire Rockstar Energy Drink Maker

PepsiCo (NASDAQ:PEP) is planning to acquire Rockstar Energy Beverages, the maker of the Rockstar energy drink line.

Energy Drink Deal: PepsiCo (PEP) to Acquire Rockstar Energy Drink Maker

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According to a PepsiCo news release, the company is planning to pay $3.85 billion to acquire the Rockstart energy drink company. It doesn’t expect this acquisition to have a material impact on its 2020 revenue or earnings per share.

PepsiCo says that it plans to make use of Rockstart Energy Beverages to beef up its own offerings in the energy drink category. Specifically, it mentions using its own brands, such as Mountain Dew, in the sector.

Russ Weiner, the founder of Rockstar Energy Beverages, says this about the deal with Pepsico.

“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. 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.”

The financial advisor to PepsiCo for the deal is Centerview Partners, with Gibson, Dunn & Crutcher acting as lead counsel and Davis Polk & Wardwell serving as U.S. tax and antitrust counsel. Rockstar Energy Beverages’ financial advisor is Goldman Sachs and legal advice comes from King & Spalding.

PepsiCo and Rockstar Energy Beverages will have to get regulatory approval before the deal can close. So long as there are no issues, the deal is set to reach completion in the first half of 2020.

PEP stock was down 3.36% as of Wednesday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.

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