Tropicana and other juice brands are being sold off by PepsiCo in a $3.3 billion deal.
In a $3.3 billion agreement with French equity firm PAI Partners, PepsiCo (PEP) has sold its Tropicana, Naked, and other select juice brands in North America.
PepsiCo will also get a 39 percent ownership in a newly created joint venture with PAI, as well as exclusive distribution rights for the juice brands in the United States.
In a statement, PepsiCo Chairman and CEO Ramon Laguarta stated, “This joint venture with PAI enables us to achieve considerable upfront value while providing the focus and resources necessary to create additional long-term growth for these valued brands.”
“In addition, it will allow us to focus on increasing our range of healthier foods, zero-calorie beverages, and products like SodaStream that are focused on being better for people and the environment,” he added.
PAI will also have the first-right option to buy certain Pepsi-branded juice businesses in Europe as part of the deal, which is anticipated to close in late 2021 or early 2022.
According to Pepsi, the proceeds from the sale will be used to enhance the company’s balance sheet and to reinvest organically in the business.
PepsiCo’s juice division brought in around $3 billion in revenue, but it fell short of the company’s overall operating margin, according to the company.
PepsiCo reported net sales of $70.37 billion in 2020, representing a 4.8 percent increase over the previous year.
As of 10:56 a.m. ET on Tuesday, PepsiCo shares were trading at $156.94, up 62 cents, or 0.40 percent.