The global marketing pact will see Pepsi promote its sponsorship of the club through advertising and promotional activity.
The company has had a relationship with football since 1997, when it signed a deal with Manchester United, and has also had relationships with footballers such as David Beckham and Rivaldo, as well as Real Madrid players Roberto Carlos and Raul.
"Football delivers excitement like no other sport in the world and Real Madrid is among the elite teams in terms of championships and fan recognition," Antonio Lucio, chief marketing officer of PepsiCo Beverages International, said.
Real Madrid, home to Luis Figo, one of the world's highest-paid footballers, was recently named as the biggest football brand in the world, beating Manchester United and Inter Milan. The club lends its name to such upmarket lines as a range of clothing, wine and watches.
"A global partner like Pepsi is a great fit for our club as we share many of the same values for winning," Jose Angel Sanchez, general manager of marketing at Real Madrid, said.
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