In a deal worth $3.85 billion, PepsiCo has agreed to acquire Las Vegas-based Rockstar Energy Beverages.
The privately held energy drink maker, whose products come in more than 30 flavors and are sold in over 30 countries, has had a distribution partnership with PepsiCo in North America since 2009.
PepsiCo chairman and CEO Ramon Laguarta noted the acquisition would help advance his company’s expansion into the category alongside its existing brands, such as Mountain Dew. “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,” Laguarta said in a statement.
As a category, energy drinks are anything but tired. Between 2013 and 2018, U.S. sales of both energy drinks and energy shots increased nearly 30%, hitting about $13.5 billion last year, according to CNBC.
Last month, Monster Beverage Corp., a leader in the energy space that’s partially owned by Pepsi rival Coca-Cola, revealed that 2019 net sales rose 10% to $4.20 billion.
“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,” said Russ Weiner, who founded Rockstar in 2001, in a statement. “PepsiCo shares our competitive spirit and will invest in growing our brand even further.”
If regulators approve the transaction, PepsiCo expects the deal to close in the first half of 2020.