(Reuters) -PepsiCo has increased its stake in energy drink maker Celsius Holdings through a $585 million deal, the companies said on Friday.
The deal, under which the soda giant bought 5% in Celsius’ preferred stock, brings PepsiCo’s stake in the company to about 11% after conversion. PepsiCo had paid $550 million for an 8.5% stake in Celsius in 2022.
Shares of Celsius, which have more than doubled in value this year, surged 11% in premarket trading on the news.
As part of the agreement, Celsius’ health and wellness drinks brand, Alani Nu, will move into PepsiCo’s distribution system in the U.S. and Canada.
The increase in stake comes as PepsiCo seeks to capitalize on Alani Nu’s rapid growth and broad appeal among fitness-focused female consumers.
Celsius had bought Alani Nutrition in an $1.8 billion deal earlier this year.
(Reporting by Anshi Sancheti and Savyata Mishra in Bengaluru; Editing by Shilpi Majumdar)
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