Celsius Holdings, Inc. (Nasdaq: CELH) (“Celsius Holdings”) and PepsiCo, Inc. (Nasdaq: PEP) (“PepsiCo”) have announced a major expansion of their long-term strategic partnership, underscoring their commitment to shaping the future of the fast-growing energy beverage category. The agreement represents a significant step forward in how both companies will collaborate, align brand strategies, and capture growth opportunities across the U.S. and Canadian markets.
Under the new arrangement, three key developments will reshape the competitive energy drink landscape:
- Distribution Expansion for Alani Nu®: Celsius Holdings’ Alani Nu brand, known for its strong appeal among female consumers and fitness enthusiasts, will now be integrated into PepsiCo’s powerful distribution network across the U.S. and Canada. This move is expected to significantly increase Alani Nu’s availability in retail outlets, foodservice, and emerging channels.
- Financial Strengthening Through Equity Transaction: PepsiCo has invested $585 million in newly issued convertible 5% preferred stock of Celsius Holdings. At the same time, the conversion period of PepsiCo’s existing preferred stock has been extended to align with the new issuance. This capital infusion reflects PepsiCo’s confidence in Celsius’ growth trajectory and deepens the companies’ financial alignment.
- Rockstar Energy® Acquisition: Celsius Holdings has acquired PepsiCo’s Rockstar Energy brand in the U.S. and Canada. While PepsiCo will continue to own Rockstar Energy globally, Celsius Holdings will integrate the brand domestically, complementing its CELSIUS® and Alani Nu products. PepsiCo will remain the distributor of Rockstar Energy in the U.S. and Canada on behalf of Celsius, ensuring continuity while allowing Celsius to drive brand positioning and strategy.
As part of the transaction, PepsiCo’s ownership stake in Celsius Holdings will rise to approximately 11% on an as-converted basis. Additionally, PepsiCo will nominate an extra director to the Celsius Holdings board of directors, further cementing strategic alignment between the two companies.
A Strengthened Role for Celsius Holdings
With this agreement, Celsius Holdings will assume the role of PepsiCo’s strategic energy lead in the U.S., managing brand development and marketing for the CELSIUS®, Alani Nu®, and Rockstar Energy® portfolios. PepsiCo, in turn, will spearhead distribution efforts across both the U.S. and Canada, bringing its unmatched scale and execution capabilities to strengthen retail penetration and availability.
“This is a transformational moment for Celsius Holdings,” said John Fieldly, Chairman and CEO of Celsius Holdings. “Stepping into the role of PepsiCo’s strategic energy drink captain in the U.S. represents a pivotal milestone in our journey to shape the future of modern energy. With a proven functional beverage portfolio, a deepened partnership with PepsiCo, and the addition of Rockstar Energy, we are positioned to drive greater innovation, sharper execution, and stronger long-term brand growth. Together, we will reach more people, in more places, more often, with a total energy portfolio designed for every consumer, ultimately creating greater value for all our stakeholders.”
PepsiCo’s Vision for a Multi-Brand Energy Portfolio
PepsiCo also emphasized the strategic importance of this expanded collaboration. The energy drink market has been one of the most dynamic and fastest-growing segments in the beverage industry, with consumers increasingly seeking functional benefits, lifestyle positioning, and a variety of taste experiences.
Ram Krishnan, CEO of PepsiCo Beverages North America, highlighted: “This agreement represents the next step in reshaping our brand portfolio for sustained growth. Energy is a critical growth category, and this collaboration with Celsius allows us to deliver a stronger multi-brand energy portfolio. Together, we will be better positioned to serve diverse consumer groups, from those seeking functional, fitness-forward products to those who enjoy traditional energy flavors. Importantly, this transaction creates an aligned incentive structure for both PepsiCo and Celsius to bring their expertise to the table, enabling us to better compete in this high-potential category.”
Strategic Rationale for the Agreement
The expanded partnership is built on a clear strategic rationale, offering multiple benefits for both companies:
- Unified Energy Strategy in the U.S.: By becoming PepsiCo’s energy category captain, Celsius Holdings will guide the strategy behind planogram design, SKU prioritization, and promotional campaigns. This unified approach ensures greater coherence across three distinct but complementary brands—CELSIUS®, Alani Nu®, and Rockstar Energy®.
- Expanded Reach for Alani Nu®: Alani Nu’s integration into PepsiCo’s distribution system is expected to significantly increase visibility and availability across North America. With its strong positioning among women and lifestyle-oriented consumers, Alani Nu adds a unique dimension to PepsiCo’s energy portfolio. The brand’s retail expansion will also include penetration into foodservice and other growth channels.
- Diversified Consumer Appeal Through Rockstar Energy®: The acquisition of Rockstar Energy in the U.S. and Canada gives Celsius Holdings a traditional energy drink brand that appeals to consumers who prefer classic flavors and formats. This broadens Celsius’ reach, complementing the performance-driven CELSIUS® line and lifestyle-focused Alani Nu®.
- Financial Alignment and Shareholder Value: The investment and equity alignment between PepsiCo and Celsius strengthen the partnership’s financial foundation. By ensuring shared incentives, both companies are positioned to accelerate growth, drive operational efficiencies, and create value for shareholders.
Advisors to the Transaction
The complexity of the transaction required leading global advisors:
- For Celsius Holdings: UBS Investment Bank and Goldman Sachs & Co. LLC served as co-financial advisors, while Freshfields US LLP and Greenberg Traurig, P.A. acted as legal counsel.
- For PepsiCo: Centerview Partners LLC was the lead financial advisor, supported by BofA Securities as financial advisor. Cravath, Swaine & Moore LLP provided legal counsel in the U.S., and McCarthy Tétrault LLP acted as Canadian legal advisor.
Positioning for the Future
The energy beverage market continues to expand rapidly, with shifting consumer trends emphasizing wellness, performance, and lifestyle positioning. This collaboration between Celsius Holdings and PepsiCo creates a uniquely structured, multi-brand portfolio that can address a wide spectrum of consumer preferences.
For Celsius, the acquisition of Rockstar Energy and the expanded role as PepsiCo’s U.S. energy lead positions the company as a key innovator and category shaper. For PepsiCo, the integration of Alani Nu into its distribution system and its deeper financial ties with Celsius ensure that it remains a powerhouse in one of the industry’s most lucrative categories.
As both companies look ahead, their aligned strategy is designed not only to capture greater market share but also to redefine what the energy drink category can deliver to consumers across North America.
