PepsiCo will sell Tropicana, Naked, and other select juice brands across North America to PAI Partners.
"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," said PepsiCo chairman and CEO Ramon Laguarta, in a statement. "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."
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, said the company. 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 in late 2021 or early 2022, subject to customary conditions, including works council consultations and regulatory approvals.
"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," said Frédéric Stévenin, a managing partner at PAI, in a statement. "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."
Related: PepsiCo CEO Shares Here-to-Stay Trends; PepsiCo, Beyond Meat Partner.
Image: PepsiCo