Pepsi has plans to edge further into the energy drinks category by acquiring a rival beverage maker in a $3.85 billion deal.
Pepsi announced Wednesday that it entered into an agreement with Rockstar Energy Beverages, which offers an extensive line of caffeinated canned drinks, many of which are low calorie and low sugar.
The deal is expected to close within the next few months.
Pepsi’s energy drink portfolio already includes Mountain Dew’s Kickstart and GameFuel for video gamers. And the company has had a distribution agreement with Rockstar in North America since 2009.
Can cash carry coronavirus? World Health Organization says use digital payments when possible
Your smartphone is 7 times dirtier than your toilet:Here’s how to clean it.
However, the takeover enables Pepsi to capture more consumers who are shifting further away from sugary sodas in favor of seemingly healthier teas and coffees with no added sugar.
“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,” said Pepsi CEO Ramon Laguarta in a statement.
Rockstar, founded in 2001, makes 30 variations of 16-ounce drinks that are sold in convenience stores and grocers in more than 30 countries. The beverages are popular among athletes and performers.
Pepsi doesn’t expect the deal to impact its revenue or earnings in 2020.
The acquisition is the latest in a series of blockbuster deals as legacy beverage manufacturers pivot to capture changing consumer demand. In 2019, Coca-Cola announced that it has completed the acquisition of Costa Limited in a $4.9 billion move that placed the soda giant in direct competition with Starbucks.
Pepsi bought one of the most popular sparkling water brands in the world, SodaStream, in 2018.
Follow Dalvin Brown on Twitter: @Dalvin_Brown.