Why Shares Of Celsius Are Rising Today: PepsiCo And Celsius Team-Up

Shares of Celsius Holdings, Inc. CELH are trading higher today after the company announced a long-term distribution agreement with PepsiCo, Inc. PEP, which will also make an investment in Celsius.  

Under the agreement, PepsiCo will become the preferred distribution partner globally for Celsius.

In addition, PepsiCo will make a net cash investment of $550 million in Celsius in exchange for convertible preferred stock. The investment equates to an estimated 8.5% ownership in Celsius on an as-converted basis. 

“We believe the opportunity to partner with a global best-in-class distributor provides Celsius with significant near-term additional shelf space in both existing retailers as well as new expansion within the independent retailers that represent a significant portion of the U.S. convenience and gas channel where approximately 70% of energy drinks are sold. It also provides a strategic partnership that is expected to accelerate growth for both companies globally,” Celsius CEO and Chairman John Fieldly said.

See Also: Could PepsiCo Buy Out Celsius Holdings Or Monster Beverage? Why M&A In Energy Drinks Market Is Heating Up

Price Action: Celsius shares are up 8.66% at $96.67 at the time of publication, according to Benzinga Pro.

Photo: Courtesy of Sam Cumming on Unsplash