PepsiCo to sell its juice brands to PAI Partners for $3.3 billion

The soft drink manufacturer PepsiCo has announced to sell its juice brands to PAI Partners for $3.3 billion.

The Juice brands include Tropicana, Naked and other select brands across North America, the deal with French private equity firm PAI Partners will net pretax cash proceeds of $3.3 billion for Pepsi.

The Chairman and Cheif Executive Officer of PepsiCo, Ramon Laguarta said:

“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,”

“In addition, it will free us to concentrate on our current portfolio of diverse offerings, including growing our portfolio of healthier snacks, zero-calorie beverages, and products like SodaStream which are focused on being better for people and the planet.”

The Managing Partner at PAI, Frédéric Stévenin, said:

“We are delighted to bring these storied beverage brands into the PAI portfolio through another partnership with a leading global food and beverage company. We believe there is great growth potential to be realized through investments in product innovation, expansion into adjacent categories, and enhanced scale in branded juice drinks and other chilled categories,”

“We are also thrilled that PepsiCo will remain involved as our partner in the joint venture as we execute our plans to drive the future success of these brands.”

These juice businesses delivered approximately $3 billion in net revenue in 2020 with operating profit margins that were below PepsiCo’s overall operating margin in 2020. PepsiCo expects to use the proceeds from the sale of these assets primarily to strengthen its balance sheet and to make organic investments in the business.

The transaction is expected to close by end of 2021 or early 2022, Pepsi also said it will use the proceeds from the sale to boost its balance sheet and invest back in its business.