LONDON: PepsiCo Inc is to sell Tropicana, Naked and other juice brands to French private equity firm PAI Partners for US$3.3bil (RM13.9bil) as it seeks to bolster its balance sheet and focus on healthier snacks and zero-calorie drinks.

       The US drinks giant will retain a 39% non-controlling interest in a new holding company for the brands and has also granted PAI an irrevocable option to buy certain juice businesses in Europe, according to a statement.

       PepsiCo said it plans to use the proceeds from the deal to strengthen its balance sheet and invest in the wider business.

       Paris-based PAI is an experienced investor in the food and beverage space and is behind Refresco, the biggest independent bottler of beverages globally.

       PAI’s proposed joint venture with PepsiCo is similar to one it created when it merged its R&R ice-cream business with large parts of Nestle’s ice-cream division to create Froneri.

       “This joint venture with PAI enables us to realise significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” PepsiCo chairman and chief executive officer Ramon Laguarta said in the statement.

       “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,” he said.

       The PepsiCo juice businesses delivered about US$3bil (RM12.7bil) in net revenue in 2020.

       Chief financial officer Hugh Johnston noted in an interview that the margins for the business are lower than PepsiCo’s average, and so the deal will “incrementally benefit margins.”

       “The juice category has obviously had some challenges over the past 10 or so years, and recently as the business gained a little bit of momentum and we started to think about where we wanted to prioritise our efforts, we made a decision that it might make sense for someone else to run Tropicana,” Johnston said.

       While juice is high in sugar, it’s also natural, and has immunity benefits.

       The French private equity firm, which focuses in consumer goods and especially food and beverage, would find a way to translate that benefit by introducing juice blends, changing product compositions, and focusing on natural hydration, said Maud Brown, head of PAI’s US office. — Bloomberg