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

<p>PepsiCo (NASDAQ: PEP) plans to acquire Rockstar Energy Beverages, the maker of the Rockstar energy beverage line.

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According to a press release from PepsiCo, the company plans to pay $ 3.85 billion to acquire Rockstart energy drink company. It does not expect this acquisition to have a material impact on earnings or earnings per share for 2020.

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

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

“We’ve had a strong partnership with PepsiCo over the last decade, and I’m happy to take it to the next level and merge as a company. PepsiCo shares our competitive spirit and will invest in growing our brand further. I am proud of what we built and how we have changed the game in the energy room. ”

The financial advisor to PepsiCo for the deal is Centerview Partners, with Gibson, Dunn & Crutcher as lead advisers and Davis Polk & Wardwell as US tax and antitrust advisors. Rockstar Energy Beverage’s financial advisor is Goldman Sachs and legal advice comes from King & Spalding.

PepsiCo and Rockstar Energy Beverages must obtain regulatory approval before the deal can be closed. As long as there are no problems, the agreement will be completed during the first half of 2020.

The PEP share fell by 3.36% as of Wednesday afternoon.

At the time of writing, William White had no position in any of the above securities.