Pepsi Makes a $3.85 Billion Bid to Acquire Rockstar

World known Beverage Company PepsiCo Inc. (PEP) has put forward a $3.85 billion bid to acquire energy drinks company Rockstar Energy Beverages with an aim of penetrating deeper the energy drinks markets.

The company said it doesn’t expect this acquisition to impact its earnings per share or revenue for the year 2020 in any major way.

The current CEO of Pepsi Ramon Laguarta has made it his goal to cut down the company’s dependence on its trademark sugary drinks and salty snack switching the demand to more health conscious drinks.

Mid last year Pepsi acquired South Africa based Pioneer Food Group, a company involved in production of cereals and fruit juices. Also during the first quarter of last year Pepsi acquired SodaStream- a machine used in production of carbonated drinks at a price of $3.2 billion.

This latest move indeed proves Pespsi is doing anything possible to catch up with its industry peer Coca-Cola Co (CO) which owns a significant stake in energy drinks firm Monster Beverage Corp. (MNST).

Last year Coca-Cola embarked on a strategy of producing Coke-branded energy drinks which the company introduced to the U.S market and multiple European markers thereafter.

Pepsi was the first to launch this strategy with its Mountain Dew Kickstart and Mountain Dew Game energy drinks. Nonetheless, Pepsi is responsible for disbursing Rockstar products in some markets.

Larguarta has repeatedly expressed the company’s objectives of increasing its market share in the caffeinated beverages industry citing that extend working hours for workers in the U.S  is creating an increasing demand for energy drinks.

According to analyst John Boylan, this could be a strategic move pulled by Pepsi which has a very high possibility of working in their favor.

“With Rockstar underneath their wings, they’ll have a family of energy drinks… they can coordinate the activity of an entire family of brands to meet a variety of needs of people,” said Boylan.