Keurig Dr Pepper will initially invest $990 million for a 60% stake in Ghost energy drink|Phillip Pessar|CC BY 2.0

Keurig Dr Pepper is acquiring energy-drink maker Ghost for more than $1 billion. According to the deal announced yesterday, Keurig will initially invest $990 million for a 60% stake and plans to buy the remaining 40% by 2028.

The Ghost deal is a relatively smaller one for the Massachusetts-based Keurig, valued at nearly $50 billion, but it is still the company’s biggest since it bought Dr Pepper Snapple in 2018 for $19 billion.

Ghost, founded in 2016, is known for its flavored energy drinks, such as Sour Patch Kids and Warheads. It also sells supplements. Founders Dan Lourenco and Ryan Hughes will continue leading the brand.

Keurig owns sodas and hot drinks like Canada Dry, Sunkist, Green Mountain Coffee and Swiss Miss. Now, it wants to expand into the energy drink market as an increasing number of people move away from coffee.

Keurig is not the only one. Coca-Cola is the largest shareholder in Bang Energy owner Monster, and PepsiCo has a $550 million stake in Celsius.

The energy drink market is highly competitive and has many options, with players like Red Bull, Monster (worth over $50 billion), Celsius (worth $7 billion), and newer brands like Alani Nu and Prime.