PepsiCo : to divest Tropicana, Naked Juice and more
August 03, 2021 at 10:00 am EDT
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PepsiCo Inc. has entered into an agreement with PAI Partners to sell Tropicana, Naked Juice and other select juice brands across North America, and an option to sell certain juice businesses in Europe, which will result in combined pre-tax cash proceeds of approximately $3.3 billion while retaining a 39% non-controlling interest in a newly-formed joint venture, according to a press release.
PAI, a private equity firm active in the food and beverage space, will be the majority shareholder of the transferred business, with PepsiCo retaining exclusive U.S. distribution rights to the portfolio of brands in its chilled direct store delivery for small-format and foodservice channels.
"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," PepsiCo Chairman and CEO Ramon Laguarta said in the release. "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."
The 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.
The transaction is expected to close in late 2021 or early 2022, subject to customary conditions, including works council consultations and regulatory approvals.
PepsiCo, Inc. is one of the worldwide leaders in producing non-alcoholic beverages and snacks. Net sales break down by area of activity as follows:
- North America (60.8%): sale of beverages (49.7% of net sales; sodas, concentrated juices, water, tea and coffee-based beverages; Aquafina, Diet Mountain Dew, Diet Pepsi, Gatorade, Gatorade Zero, Mountain Dew, Pepsi, Propel brands, etc.), snacks (44.7%; chips, tortillas and pretzels; Lay's, Doritos, Tostitos, Cheetos, Fritos, Ruffles, etc.), and cereals (5.6%; ready-to-eat cereals, rice, wheat, etc.);
- Europe (14.5%): sale of snacks (Cheetos, Chipita, Doritos, Lay's, Ruffles and Walkers brands) and beverages (7UP, Diet Pepsi, Lubimy Sad, Mirinda, Pepsi and Pepsi Max);
- Latin America (12.7%): sales of snacks (Cheetos, Doritos, Emperador, Lay's, Mabel, Marias Gamesa, Ruffles, Sabritas, Saladitas and Tostitos brands) and beverages (7UP, Gatorade, H2oh!, Manzanita Sol, Mirinda, Pepsi, Pepsi Black, San Carlos and Toddy)
- Asia/Pacific/Australia/New Zealand (6.7%): sale of snacks (BaiCaoWei, Cheetos, Doritos, Lay's and Smith's brands), beverages and syrups (7UP, Aquafina, Mirinda, Mountain Dew, Pepsi and Sting);
- Africa/Middle East/South Asia (5.3%): sale of snacks (Chipsy, Doritos, Kurkure, Lay's, Sasko, Spekko and White Star brands) and beverages (7UP, Aquafina, Mirinda, Mountain Dew and Pepsi).
Net sales are distributed geographically as follows: the United States (57%), Mexico (7.7%), Canada (4.1%), Russia (3.9%), China (3%), the United Kingdom (2.1%), Brazil (1.9%), South Africa (1.9%) and other (18.4%).
PEPSICO, INC. 
