PepsiCo to sell Tropicana, Naked, and other juice brands in North America

PepsiCo has agreed to sell Tropicana, Naked, and certain other juice brands in North America to PAI Partners, a French private equity firm, for around $3.3 billion.

The soft drinks giant also has a binding option to divest some juice businesses in Europe as part of the deal, while retaining a non-controlling stake of 39% in a newly created joint venture with the private equity firm.

PAI Partners will have majority stakes in the transferred business, with PepsiCo keeping with it exclusive US distribution rights to the portfolio of brands in its chilled direct store delivery for small-format and foodservice channels.

Ramon Laguarta — PepsiCo Chairman and CEO said: “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.

“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.”

PepsiCo to sell Tropicana, Naked, and other juice brands in North America to PAI Partners for $3.3bn. Photo courtesy of PepsiCo.

According to PepsiCo, the juice businesses involved in the deal earned nearly $3 billion in net revenue last year with operating profit margins that were under the company’s overall operating margin in 2020.

The soft drinks giant will look to use the proceeds from the sale of the juice businesses mainly to consolidate its balance sheet and for making organic investments in the business.

Frédéric Stévenin — Managing Partner at PAI Partners said: “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.

“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.”

The deal, which is subject to works council consultations, regulatory approvals, and customary conditions, is likely to close in late 2021 or early 2022.