NEW: PepsiCo says it has agreed to sell Tropicana, Naked and other North American juice brands to a French private equity firm.
The sale 'reflects the uncertain role of fruit juice in the consumer’s routine long term and the ongoing concern about sugar,” said one beverage analyst.
PepsiCo is selling Tropicana and other juice brands to a French private equity firm.Daniel Acker / Bloomberg via Getty Images fileAug. 3, 2021, 1:47 PM UTCByAmelia Lucas, CNBCPepsiCo announced Tuesday it has agreed to sell Tropicana, Naked and other North American juice brands to a French private equity firm.
The deal with PAI Partners will net $3.3 billion for Pepsi, which will also receive a 39 percent stake in a newly formed joint venture with PAI and the exclusive U.S. distribution rights for the juice brands for certain channels, like food service.“This joint venture with PAI enables us to realize significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” Pepsi CEO Ramon Laguarta said in a statement.
Orange juice sales saw a spike in 2020, as consumers sought out more vitamin C for immune support.PAI will also have the irrevocable option to buy certain Pepsi juice businesses in Europe.The transaction is expected to close in late 2021 or early 2022. Pepsi said it will use the proceeds from the sale to strengthen its balance sheet and invest back in its business. headtopics.com
In 2020, the brands involved in the deal generated about $3 billion in revenue for Pepsi but trailed the company’s overall operating margin. Pepsi reported net sales of $70.37 billion in 2020.“In part, the news of Tropicana and Naked reflects the uncertain role of fruit juice in the consumer’s routine long term and the ongoing concern about sugar, particularly in North America where Tropicana is largest,” said Howard Telford, head of soft drinks at Euromonitor International. “While the category in the U.S. enjoyed a boost in off-trade sales in 2020, with consumers seeking more vitamin C for immune support, the long-term trend has been one of decline.”
Many food and beverage businesses, including rival Coca-Cola, have spent the last year and a half trimming their portfolios as a response to the pandemic. In some cases, like Nestlé’s sale of its North American water business, cash-laden private equity firms rather than rival food or beverage companies have snapped up the brands on the auction block.
Shares of Pepsi have risen 5 percent this year, giving it a market value of $216 billion. In its latest quarter, the company saw its quarterly revenue soar more than 20% as restaurant demand for its drinks returned. Read more: NBC News »
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Seriously? The makers of Pepsi are worried there's too much sugar in *fruit juice*? The French Connection sharing that Juicy Juice? That Can Can Dance of 'Oh La La!'
PepsiCo to sell Tropicana, other juice brands for $3.3 billionPepsiCo Inc (PEP.O) will sell its controlling stake in Tropicana, Naked and other juice brands in North America to private equity firm PAI Partners for $3.3 billion, the beverage giant said on Tuesday. PepsiCo had raped or destroyed company's putting countless numbers of people out of work, all for profit or to kill the competition. Usually they leave the bare bones to sell to investor groups. Not surprised. But it is a great stock to own.
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