PepsiCo invests $500M in energy drink maker Celsius

PepsiCo (NASDAQ: PEP) announced that it had entered into a long-term distribution agreement with energy drink maker Celsius Holdings (NASDAQ: CELH),worth $500 million.

The soft drink giant will become the preferred distribution partner globally for Celsius and will also nominate a director to serve on its board.

Shares of Celsius jumped as much as 16% in New York. The stock had been climbing recently amid analyst speculation that PepsiCo could switch to Celsius after ending a distribution pact with Bang Energy.

Celsius is expecting to gain more shelf space in existing retailers and expand more into independent stores, such as gas stations. A statement noted that Pepsi will assist with the distribution starting Monday.