CHICAGO (S&P Global Ratings) March 11, 2020-- PepsiCo Inc. (A+/Stable/A-1) announced today that it has reached an agreement to acquire Rockstar Energy Beverages for $3.85 billion. We believe this is a good strategic move that will accelerate the company's growth in the on-trend functional energy space. However, there is little room for additional moderate-sized acquisitions because pro forma adjusted leverage is about 2.85x, including Rockstar and other recently announced transactions, some of which have not yet closed. We expect adjusted leverage to improve gradually over the next 18-24 months. The acquisition will strengthen PepsiCo's limited presence in the energy category, which we believe is growing by a mid-single-digit rate annually. PepsiCo presently distributes Rockstar, though the underlying agreement limits its
