PARIS – The private equity company PAI Partners is acquiring a majority stake in the Tropicana, Naked and other juice businesses from PepsiCo, Inc., Purchase, NY, for approximately $3.3 billion. The businesses will become part of a joint venture of which PepsiCo will own 39%.

PepsiCo also has an option to sell certain juice businesses in Europe as part of the deal, according to the companies.

“We are delighted to bring these storied beverage brands into the PAI portfolio through another partnership with a leading global food and beverage company,” said Frédéric Stévenin, a managing partner at PAI. “We believe there is great growth potential to be realized through investments in product innovation, expansion into adjacent categories, and enhanced scale in branded juice drinks and other chilled categories. We are also thrilled that PepsiCo will remain involved as our partner in the joint venture as we execute our plans to drive the future success of these brands.”

The businesses that are a part of the transaction had approximately $3 billion in sales in 2020. PepsiCo said the businesses operating margins were below the company’s overall operating margin in 2020.

“This joint venture with PAI enables us to realize significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” said Ramon Laguarta, chairman and chief executive officer of PepsiCo. “In addition, it will free us to concentrate on our current portfolio of diverse offerings, including growing our portfolio of healthier snacks, zero-calorie beverages, and products like SodaStream, which are focused on being better for people and the planet.”

Howard Telford, head of soft drinks for the market research company Euromonitor International, said the divestment is part of a larger trend in the beverage category.

“Pepsi selling Tropicana and other juice brands is another major sale, or divestment, in the drinks industry in a relatively short space of time, following Coca-Cola’s SKU rationalization in 2020 — discontinuing Odwalla juice and Zico — and the sale of Nestle Waters North American brands to private equity,” he said. “This deal reflects the desire of the industry to focus and innovate around a smaller core of categories and brands, including water, energy drinks, coffee and the staple carbonated soft drinks.”

Mr. Telford added the sale also reflects the uncertain role of fruit juices in the consumer’s daily diet.

“While the category in the US enjoyed a boost in off-trade sales in 2020, with consumers seeking more vitamin C for immune support, the long-term trend has been one of decline,” he said. “The role of fruit juice in future consumers’ diets will look significantly different in terms of portion size, functional need and packaged versus unpackaged formats.”

PAI Partners has approximately €15 billion ($17.8 billion) under its control. In 2016, PAI, through its R&R ice cream company, set up a joint venture with Nestle SA, Vevey, Switzerland, called Froneri. The business combined Nestle and R&R’s ice cream businesses and included Nestle’s European frozen food business (excluding pizza and retail frozen food in Italy), as well as a chilled dairy business in the Philippines and had approximately $2.8 billion sales.

In 2019, Nestle sold its US ice cream business to Froneri for $4 billion. The transaction made Froneri the second largest ice cream manufacturer in the world, according to the company.