Some of the world’s most popular fruit juice drinks are changing hands after PepsiCo, the beverage and snacks conglomerate, sold a majority stake in brands including Tropicana to a French private equity firm.
PAI Partners is paying about $3.3 billion for a 61 per cent stake in PepsiCo’s biggest American juice drinks. It also has an irrevocable option to buy some of the company’s juice businesses in Europe. In addition, the deal covers Naked, a Californian juice brand.
PepsiCo will keep a non-controlling 39 per cent interest in a newly formed joint venture with PAI. The group’s shares rose slighly to close 35 cents, or 0.2 per cent, up at $156.67.
PepsiCo, based in Harrison, New York, was created in 1965 via the merger of the Pepsi-Cola Company and Frito-Lay. Its eponymous cola drink traces its origins to 1893. In Britain it owns brands including Walkers and Doritos crisps, Quaker oats and Nobby’s Nuts.
Its deal with PAI, which formerly owned B&B Hotels, the European budget hotels chain, is subject to regulatory approval and is expected to close towards the end of this year or early next. The brands included in the agreement generated about $3 billion in net revenue last year, PepsiCo said, and operating profit margins below the company’s average levels.
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PepsiCo bought Tropicana, one of the world’s biggest juice brands, for $3.3 billion in 1998. It bought Naked Juice in 2007.
Ramon Laguarta, 58, chairman and chief executive of Pepsico, said: “This joint venture with PAI enables us to realise significant upfront value, while 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.”
Frédéric Stévenin, 56, a managing partner at PAI, welcomed Pepsico’s continued involvement in the joint venture. “We believe there is great growth potential to be realised through investments in product innovation, expansion into adjacent categories and enhanced scale in branded juice drinks and other chilled categories,” he said.
PAI has been strengthening its presence in the food and beverages sector over recent years. In 2019, Nestlé, the Swiss multinational, sold its American ice cream business — home to brands including Häagen-Dazs — to a joint venture backed by the firm in a $4 billion deal.
