PURCHASE, NY. – PepsiCo, Inc. has acquired an 8.5% ownership stake in Celsius Holdings, Inc., Boca Raton, Fla., for $550 million. Celsius is a manufacturer of energy and fitness beverages sold under the Celsius brand.

The investment also includes a distribution agreement that will transition Celsius’ current US distribution system to PepsiCo. PepsiCo also will become the preferred distribution partner globally for Celsius, according to the company.

“We are extremely pleased to partner with Celsius and excited about the opportunity for our two organizations to drive growth and innovation in the energy beverage category,” said Kirk Tanner, chief executive officer of PepsiCo Beverages North America. “The Celsius brand’s growing momentum coupled with the strength of PepsiCo’s portfolio and go-to-market capabilities create a combination we believe will be very compelling and valuable to retailers and consumers.  We are looking forward to seeing the impact these two outstanding organizations can make together to more fully capture energy occasions.”

John Fieldly, chairman and CEO of Celsius, added, “We believe the opportunity to partner with a global best-in-class distributor provides Celsius with significant near-term additional shelf space in both existing retailers as well as new expansion within the independent retailers that represent a significant portion of the US convenience and gas channel where approximately 70% of energy drinks are sold.

“It also provides a strategic partnership that is expected to accelerate growth for both companies globally. In addition, this partnership will drive efficiencies allowing our teams to consolidate sales, marketing, and distribution efforts with associated cost benefits, which we expect to recognize once the initial transition is completed.”

The investment in Celsius continues PepsiCo’s efforts to gain share in the market for energy beverages. The company acquired Rockstar Energy Beverages in 2020 for $3.85 billion.

That same year PepsiCo entered into an agreement with Vital Pharmaceuticals Inc., Weston, Fla., the maker of the Bang Energy drink portfolio, to distribute the beverages in the United States. That agreement later turned acrimonious and led Vital Pharmaceuticals to sue PepsiCo to terminate the agreement.