In Depth

Pepsi enters energy drink market with $3.85bn Rockstar deal

Pepsi is attempting to diversify by acquiring Rockstar Energy Beverages

Drinks giant PepsiCo has its sights on the growing energy drink market, acquiring Rockstar Energy Beverages for $3.85 billion.

Neither Pepsi nor its main rival Coca-Cola own a major brand in the energy drinks market - although Coke has a stake in Monster. Pepsi’s move for Rockstar could be the first major move in a battle for dominance in the category, as soft drinks companies diversify away from their traditional offerings.

For Rockstar founder Russ Weiner, the deal represents a huge reward for the $50,000 investment he made to launch the company in 2001.

He told Fox Business that the deal with Pepsi “is going to make this a global powerhouse brand, and my legacy will be safe with them.”

The companies have been affiliated for some time. “Pepsi has had a distribution agreement with privately held Rockstar in North America since 2009,” reports CNBC.

Coca-Cola’s similar distribution deal with Monster had prevented them from selling their own energy drinks in the US until last year, but Pepsi’s deal with Rockstar should “enable the company to sidestep any legal tussle like the one that ensnared Coca-Cola,” says The Wall Street journal.

“PepsiCo shares were down 3.8 per cent in pre-market trading on Wednesday,” The Financial Times reports, “slightly worse off than the 3.4 per cent drop for the S&P 500 that was implied by futures as investors continue to grapple with volatility amid the coronavirus outbreak and following Monday’s oil price plunge.”

–––––––––––––––––––––––––––––––For a round-up of the most important business stories and tips for the week’s best shares - try The Week magazine. Get your first six issues free–––––––––––––––––––––––––––––––

Recommended

Billionaires in space: essential innovation or ‘costly vanity project’?
Blue Origin’s New Shepard crew posing after flying into space
In Focus

Billionaires in space: essential innovation or ‘costly vanity project’?

Food inflation: a headache for CEOs and consumers alike
Commodity prices are squeezing profit margins
Why we’re talking about . . .

Food inflation: a headache for CEOs and consumers alike

China General Nuclear: banned from Britain?
David Cameron and Xi Jinping
In Focus

China General Nuclear: banned from Britain?

The future of the British high street
Gravity Southside in Wandsworth, London
Why we’re talking about . . .

The future of the British high street

Popular articles

Why your AstraZeneca vaccine may mean no European holidays
Boris Johnson receives his second dose of the Oxford-AstraZeneca vaccine
Getting to grips with . . .

Why your AstraZeneca vaccine may mean no European holidays

‘Wobbling’ Moon will cause worldwide flooding, Nasa warns
Flooding in Florida after Hurricane Irma hit in 2017
Why we’re talking about . . .

‘Wobbling’ Moon will cause worldwide flooding, Nasa warns

What next as homes raided in search for Hancock affair whistle-blower?
Matt Hancock leaving No. 10 with Gina Coladangelo in May 2020
The latest on . . .

What next as homes raided in search for Hancock affair whistle-blower?

The Week Footer Banner