US: Coca-Cola Co secures stake in Monster Beverage Corp for US$2.15bn
Coca-Cola will transfer its energy brands to Monster
The Coca-Cola Co is to hand its energy portfolio to Monster Beverage Corp after agreeing to pay US$2.15bn for a 16.7% stake in the energy drinks company.
Coca-Cola said the move, announced late yesterday in the US, will see Monster become a “pure-play” global energy drinks company and accelerate growth in the category. Under the terms of the deal, Coca-Cola will transfer ownership of its energy business, including NOS, Full Throttle, Burn, Mother, Power Play and Relentless, to Monster.
Meanwhile, Coca-Cola will take on Monster's non-energy brands such as Hansen’s Natural Sodas, Peace Tea and Hubert’s Lemonade. The deal also gives Coca-Cola two directors on Monster’s board.
Coca-Cola CEO Muhtar Kent described the investment as a “capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category”.
He added: “This long-term partnership aligns us with a leading energy player globally, brings financial benefit to our company and our bottling partners, and supports broader commercial strategies with our customers to bring total beverage growth opportunities that will also benefit our core business.”
Coca-Cola has had a distribution deal with Monster in the US and Canada since 2008. In 2012, the deal accounted for 30% of Monster's US sales.
The new agreement, which caps long-term speculation over a Coca-Cola takeover of Monster, will see both companies expand the distribution deal into new territories in North America. Coca-Cola will become Monster’s preferred distribution partner globally and Monster will become Coca-Cola “exclusive energy play”, the companies said.
The transaction is expected to close late this year or early next year and is subject to regulatory approvals.
To read the company's official statement, click here.
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