PepsiCo to acquire energy drink maker Rockstar

The deal further diversifies the CPG's beverage portfolio and pushes more into a growing category.

PepsiCo is making inroads in the energy drink space by reaching an agreement to buy Rockstar, the energy drink maker founded in 2001 and distributed in 30 countries, in a deal worth $3.85 billion USD.

In a release announcing the acquisition, PepsiCo chairman and CEO Ramon Laguarta stated that the company expects “to capture our fair share of this fast-growing, highly profitable category and create meaningful new partnerships in the energy space.”

Rockstar CEO Russ Weiner said the company has had a strong partnership with PepsiCo for the last decade – PepsiCo has had a distribution agreement with Rockstar since 2009 – and that he is “happy to take that to the next level and join forces as one company.”

PepsiCo already has a portfolio of energy drinks under its Mountain Dew brand, but the acquisition gives it further opportunity to capitalize on a category that continues to grow through an established brand. According to Mordor Intelligence, the global energy drinks market is predicted to grow with a CAGR of 7.1% between 2019 and 2024, with North America being the largest market. PepsiCo has been looking to more non-soda beverages to diversify its portfolio, such as through the launch of sparkling water brand Bubly.

The acquisition, which remains subject to standard regulatory closing conditions, is expected to close in the first half of this year.

Rival Coca Cola launched its own line of Coke-branded energy drinks in North America in January. The brand recently made its first major push on social to coincide with the Daylight Savings Time switch to spring forward, urging consumers to “Get a delicious energy boost to get through Daylight Saving Time! #ShowUp this week with #CokeEnergy.” The beverage maker has been pushing into more beverage products as well, delving into a more premium space through the launch of its specialty sodas in Canada last summer.