Beverage giant PepsiCo (PEP) has increased its stake in energy drink company Celsius Holdings (CELH).
According to multiple media reports, PepsiCo has invested an additional $585 million U.S. in Celsius, giving the soft drink company another 5% of Celsius’ preferred stock.
PepsiCo's now owns 13.5% of Celsius Holdings, which is known for its flavoured energy drinks that claim to accelerate people’s metabolism and help them lose weight.
Initially, PepsiCo paid $550 million U.S. in 2022 for an 8.5% stake in Celsius.
As part of the latest agreement, Celsius' health and wellness drink brand, Alani Nu, will move into PepsiCo's distribution system in the U.S. and Canada.
Celsius bought Alani Nutrition in a $1.8 billion U.S. deal earlier this year.
PepsiCo has said that it wants to capitalize on the rapid growth of Celsius’ drinks and their popularity among fitness-focused and health-conscious female consumers.
Shares of Celsius have more than doubled (up 120%) this year and are up another 8% in premarket trading on Aug. 29 on news of the increased PepsiCo stake.
PEP stock has declined 2% this year to trade at $146.98 U.S. per share.
