PepsiCo Inc. is deepening its bet on the fast-growing energy drinks market with a $585 million investment in Celsius Holdings Inc., raising its stake to 11% and reshaping its U.S. energy portfolio.
As part of the deal, Celsius will acquire PepsiCo’s Rockstar Energy business in the U.S. and Canada. At the same time, Alani Nu — a female-focused energy drink brand recently acquired by Celsius — will shift to PepsiCo’s distribution system in those markets, improving efficiency and expanding retail reach.
The arrangement makes Celsius the strategic energy lead for PepsiCo in the U.S., managing the Celsius, Alani Nu, and Rockstar brands, while PepsiCo will continue to oversee distribution of the Celsius portfolio. Internationally, PepsiCo will retain ownership of Rockstar Energy.
“Celsius Holdings now becomes the strategic energy drink captain for Pepsi in the U.S.,” Celsius CEO John Fieldly said. “This partnership allows us to put the fastest cars on the track — Celsius for health-focused lifestyles, Alani Nu for female consumers, and Rockstar for traditional energy drink fans.”
PepsiCo first invested $550 million in Celsius in 2022 for an 8.5% stake. The latest deal extends the conversion period on that initial investment and grants PepsiCo the right to nominate another director to Celsius’s board.
Analysts say the expanded stake could pave the way for a full acquisition, a move PepsiCo has not commented on. However, industry precedents suggest the partnership could be a stepping stone toward deeper consolidation in the highly competitive energy drinks segment.