On Friday, Celsius Holdings, Inc. ( CELH ) surged in premarket trading after unveiling a sweeping agreement with beverage giant PepsiCo Inc. ( PEP ) .

The company said that the deal reshapes the energy drink landscape in North America, giving Celsius control of additional brands and extending PepsiCo’s distribution role.

The new arrangement strengthens the long-standing partnership between the two companies, combining Celsius’ fast-rising labels with PepsiCo’s vast retail network.

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As part of the agreement, Celsius will oversee its flagship CELSIUS line, Alani Nu, and Rockstar Energy in the U.S. and Canada, while PepsiCo ( PEP ) expands its investment and distribution reach.

Celsius has now added the Rockstar Energy brand for the U.S. and Canadian markets, broadening its offerings with a traditional-style energy drink.

This complements Celsius’ performance-focused beverages and Alani Nu’s lifestyle-driven lineup.

PepsiCo ( PEP ), meanwhile, retains ownership of Rockstar outside North America but will handle domestic distribution on behalf of Celsius.

According to Benzinga Pro, CELH stock has gained over 58% in the past year. Investors can gain exposure to the stock via AdvisorShares Trust AdvisorShares Vice ETF .

PepsiCo’s Deeper Stake

To cement the alliance, PepsiCo ( PEP ) purchased $585 million in new convertible preferred shares and now holds about 11% of Celsius on an as-converted basis.

PepsiCo ( PEP ) also secured the right to appoint another board member at Celsius, further aligning leadership.

The move positions Celsius as PepsiCo’s lead partner in guiding energy strategy in the U.S.

Executives from both companies emphasized the long-term growth opportunity.

John Fieldly, chairman and CEO of Celsius, said the new role as “strategic energy drink captain” allows the company to drive innovation while tapping into PepsiCo’s scale.

Ram Krishnan, CEO of PepsiCo Beverages U.S., described the move as part of a portfolio realignment designed to capture more consumer segments in a growing energy category.

According to Benzinga Pro, PEP stock has lost over 14% in the past year. Investors can gain exposure to the stock via iShares U.S. Consumer Staples ETF ( IYK ) .

By integrating Alani Nu into PepsiCo’s distribution system, Celsius aims to capture more health-conscious, female-oriented consumers.

The addition of Rockstar caters to traditional energy drink fans, giving Celsius a well-rounded portfolio that could accelerate market share gains.

Price Action: CELH shares are trading higher by 8.81% to $64.92 premarket at last check Friday, PEP shares are up 0.25%.

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