PepsiCo Completes Acquisition of poppi, Accelerating Strategic Portfolio Transformation
Rhea-AI Summary
PepsiCo (NASDAQ: PEP) has completed the acquisition of poppi, a prebiotic soda brand, for $1.95 billion (net purchase price of $1.65 billion after $300 million in anticipated tax benefits). The deal includes a performance-based earnout component.
poppi is a functional beverage brand that produces low-calorie sodas containing prebiotics, fruit juice, and apple cider vinegar, with no more than 5 grams of sugar per serving. The brand has successfully engaged Gen Z and millennial audiences through social media, TikTok campaigns, and influencer partnerships.
This acquisition aligns with PepsiCo's strategic portfolio transformation, following recent acquisitions like Siete and Sabra, to meet modern wellness preferences.
Positive
- Strategic acquisition expanding PepsiCo's functional beverage portfolio with a growing brand
- Strong engagement with Gen Z and millennial demographics through social media and influencer partnerships
- Potential tax benefits of $300 million reducing the effective purchase price
- Acquisition includes performance-based earnout incentivizing growth
Negative
- Significant capital expenditure of $1.95 billion for the acquisition
- Integration costs and risks associated with incorporating the new brand
News Market Reaction
On the day this news was published, PEP declined 0.14%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
- Acquisition Advances Positive Choices Growth Strategy and Enhances PepsiCo Functional Food and Beverage Offerings
This acquisition marks a significant step in PepsiCo's ongoing transformation of its portfolio, reinforcing its commitment to meeting evolving consumer preferences for great-tasting, functional products. poppi, a fast-growing prebiotic soda brand, is among PepsiCo's recent acquisitions, including Siete and Sabra, aimed at aligning with consumers' modern wellness priorities.
"poppi represents a compelling strategic fit within our short- and long-term vision for the future of beverages," said Ram Krishnan, CEO of PepsiCo Beverages
On a mission to modernize soda for the next generation, poppi is a fast-growing functional soda brand made with prebiotics, fruit juice, and apple cider vinegar – offering a refreshing, low-calorie drink with no more than five grams of sugar per serving. poppi has taken a community- and culture-first approach – from vibrant packaging to a strong social media presence, viral TikTok campaigns, and influencer partnerships – all of which have cultivated a loyal community and effectively engaged Gen Z and millennial audiences.
"PepsiCo's belief in the poppi brand is a tremendous validation of the work we've done to advance our mission," said Chris Hall, CEO of poppi. "Their partnership and resources will be instrumental as we scale to our next phase of growth. We're incredibly grateful to our passionate community and look forward to welcoming even more consumers into the poppi portfolio."
Centerview Partners LLC acted as lead financial advisor to PepsiCo, and J.P. Morgan Securities LLC also served as a financial advisor to PepsiCo. Cravath, Swaine & Moore LLP acted as legal advisor to PepsiCo, and Davis Polk & Wardwell LLP acted as tax counsel to PepsiCo. Goldman Sachs & Co. LLC acted as financial advisor to poppi, and Cooley LLP acted as legal advisor to poppi.
About PepsiCo
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated nearly
Guiding PepsiCo is our vision to Be the Global Leader in Beverages and Convenient Foods by Winning with pep+ (PepsiCo Positive). pep+ is our strategic end-to-end transformation that puts sustainability and human capital at the center of how we will create value and growth by operating within planetary boundaries and inspiring positive change for planet and people. For more information, visit www.PepsiCo.com.
About poppi:
poppi is a prebiotic soda brand modernizing soda for the next generation. Founded by husband-and-wife duo Stephen & Allison Ellsworth,
PepsiCo Cautionary Statement
Statements in this communication that are "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. Terminology such as "believe," "expect," "future," "intend," "may," "plan," "position," "potential," "should," "will" or similar statements or variations of such words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: future demand for PepsiCo's products; damage to PepsiCo's reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo's ability to compete effectively; PepsiCo's ability to attract, develop and maintain a highly skilled workforce or effectively manage changes in our workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo's manufacturing operations or supply chain, including increased commodity, packaging, transportation, labor and other input costs; political, social or geopolitical conditions in the markets where PepsiCo's products are made, manufactured, distributed or sold; PepsiCo's ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; future cyber incidents and other disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo's reliance on third-party service providers and enterprise-wide systems; climate change or measures to address climate change and other sustainability matters; strikes or work stoppages; failure to realize benefits from PepsiCo's productivity initiatives or organizational restructurings; deterioration in estimates and underlying assumptions regarding future performance of our business or investments that can result in impairment charges; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo's credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo's products; imposition of limitations on the marketing or sale of PepsiCo's products; changes in laws and regulations related to the use or disposal of plastics or other packaging materials; failure to comply with personal data protection and privacy laws; increase in income tax rates, changes in income tax laws or disagreements with tax authorities; failure to adequately protect PepsiCo's intellectual property rights or infringement on intellectual property rights of others; failure to comply with applicable laws and regulations; and potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations.
For additional information on these and other factors that could cause PepsiCo's actual results to materially differ from those set forth herein, please see PepsiCo's filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Media Contacts:
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SOURCE PepsiCo, Inc.
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