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The
company, which bought the orange juice maker in 1998 for roughly
$3.3 billion and U.S.-based Naked Juice nearly a decade later
for $150 million, will keep a 39% stake in the new joint venture
and have exclusive U.S. distribution rights for the brands.
The sale will give PepsiCo the funds to develop and grow its
portfolio of health-focused snacks and zero-calorie beverages,
Chief Executive Officer Ramon Laguarta said, as the company
focuses on more profitable brands.
Rival Coca-Cola Co has also been streamlining its product range
over the past year, discontinuing its TaB diet soda and
Coca-Cola Energy brands in the United States and selling its
ZICO coconut water brand.
"Companies are finding it difficult to provide effective
marketing support behind an infinite number of brands that often
compete for very similar occasions," Rabobank Food and Beverage
analyst Stephen Rannekleiv said in May.
He added that companies are looking to launch new products that
have been developed in-house.
The juice businesses made about $3 billion in net revenue in
2020 for PepsiCo, with operating profit margins that were below
the group's.
The deal is one of the many food and beverage investments PAI
has made over the last few years. In 2019, Nestle SA sold its
U.S. ice cream business, including brands such as Häagen-Dazs,
to a joint venture backed by PAI in deal valued at $4 billion.
Centerview Partners is the financial advisor to PepsiCo on the
deal, while J.P. Morgan Securities LLC is advising PAI.
(Reporting by Uday Sampath in Bengaluru; Editing by Patrick
Graham and Arun Koyyur)
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