Aug 3, 2021

Thank you for supporting Money News! Here’s your first installment of all things money from this week!


PepsiCo to Sell Tropicana and Other Juice Brands for $3.3 Billion

PepsiCo announced Tuesday it has agreed to sell Tropicana, Naked and other North American juice brands to a French private equity firm.The deal with PAI Partners will net pretax cash proceeds of $3.3 billion for Pepsi. The food and beverage giant will also receive a 39% stake in a newly formed joint venture with PAI and the exclusive U.S. distribution rights for the juice brands for certain channels, like food service.PAI will also have the irrevocable option to buy certain Pepsi juice businesses in Europe.The transaction is expected to close in late 2021 or early 2022. Pepsi said it will use the proceeds from the sale to strengthen its balance sheet and invest back in its business.In 2020, the brands involved in the deal generated about $3 billion in revenue for Pepsi but trailed the company’s overall operating margin. Pepsi reported net sales of $70.37 billion in 2020.Many food and beverage businesses, including rival Coca-Cola, have spent the last year and a half trimming their portfolios as a response to the pandemic. In some cases, like Nestle’s sale of its North American water business, cash-laden private equity firms rather than rival food or beverage companies have snapped up the brands on the auction block.Shares of Pepsi have risen 5% this year, giving it a market value of $216 billion. The stock rose less than 1% in premarket trading on the news. In its latest quarter, the company saw its quarterly revenue soar more than 20% as restaurant demand for its drinks returned.Source: CNBC

Footwear Company Wolverine Worldwide Buys Lululemon Competitor, Sweaty Betty, for $410 Million

The company behind Merrell, Saucony, Sperry, Stride Rite and other well-known footwear brands is adding premium women’s activewear brand Sweaty Betty to its portfolio as it expands its categories, geographies and online sales.Wolverine Worldwide bought the 23-year-old digitally native Lululemon competitor for $410 million from consumer-focused private equity firm L Catterton. The deal, which closed Monday, was funded by cash and a revolving line of credit.The footwear portfolio company expects Sweaty Betty to immediately add to its earnings and raised its full year revenue forecast to a range of $2.44 billion to $2.5 billion, up from its previous expectations of $2.34 billion to $2.4 billion.Wolverine World Wide shares rose about 1% on the news. The stock is up more than 7% since the start of the year, bringing its market value to $2.79 billion.Sweaty Betty was founded in the United Kingdom as a digital-first brand, but it now has 65 stores in the U.K. and Hong Kong. It is expecting about $250 million in revenue this year. Online sales make up about 70% of total revenue, with 80% being sold direct-to-consumer.Source: CNBC

Canada’s Economy Rebounds, On Track for 2.5% Annualized Growth

Canada’s economy sprang back to life at the end of the second quarter, as vaccine-led reopenings spurred a return to growth.Gross domestic product likely grew 0.7 per cent in June after a 0.3 per cent drop in May, Statistics Canada reported Friday. May’s decline was in line with expectations, and coupled with the preliminary estimate for a rebound last month, annualized growth is on pace to come in at 2.5 per cent in the quarter. That’s in line with private-sector economist predictions but ahead of the Bank of Canada’s forecast of 2 per cent for the three-month period.The GDP report shows further resiliency in Canada’s economy, which has repeatedly proved it can return to growth once COVID-19 restrictions are lifted. With vaccination rates rising and virus cases low, economists predict strong growth in output in the second half of the year.Canada’s currency was little changed, trading at $1.2433 per U.S. dollar at 8:34 a.m. in Toronto. Bond market reaction was also muted, with 10-year government debt yield at 1.194 per cent.Source: BNN Bloomberg

Amazon Pandemic Bump Fades as Vaccinated Shoppers Leave Home Inc. emerged as the essential store for homebound shoppers during the coronavirus pandemic, propelling its sales and profits to new highs. Now, the rush online is slowing down as vaccinated consumers peel away from computers and smartphones and revert to old habits like traveling and dining out.The world’s biggest e-commerce retailer on Thursday reported sales and gave a forecast that fell short of expectations. Shares declined about 6.2 per cent in early trading before New York exchanges opened on Friday. It marked the first time Amazon had missed quarterly sales estimates since 2018.The Seattle-based company invested billions to operate through the pandemic while minimizing the spread of COVID-19 through its facilities and hiring hundreds of thousands of workers to meet crushing demand. New Chief Executive Officer Andy Jassy, who took the helm from founder Jeff Bezos on July 5, has to convince investors that Amazon continues to be a good long-term bet even though revenue growth is slowing and the company faces heightened scrutiny from regulators in the U.S. and Europe, its biggest markets.Source: BNN Bloomberg


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Bank of Canada: Trigger Event Coming in the Housing Market
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