Coca-Cola Buys 16.7 Percent Stake in Monster Beverage
The energy drinks sector is as hot as ever. For proof, look no further than the new deal that has just been brokered between Coca-Cola Company and Monster Beverage Corporation. Today the two beverage companies announced a long term partnership, with Coca-Cola paying $2.15 billion cash in order to acquire a 16.7% minority in Monster Beverage and become the energy drink’s primary distributor.
The deal involves quite a significant shake up the current structure of both Coca-Cola and Monster Beverage – Coca-Cola will be transferring its energy drink brands, including NOS and Full Throttle, over to Monster Beverage. Meanwhile, Monster Beverage will transfer all of its non-energy related titles, including Hansen’s Natural Sodas and Peace Tea, over to Coca-Cola. This effectively transforms Monster Beverage into a laser-focused pure play energy drink company while putting a broader range of products under the Coca-Cola Company’s portfolio umbrella.
The deal also puts two representatives from the Coca-Cola Company to Monster Beverage's Board of Directors, giving the company some say in Monster’s business decisions from now on. In a joint press release issued to announce the partnership, Coca-Cola’s CEO discussed the deal and Coke’s commitment to staying at the forefront of consumer trends:
Meanwhile, Monster Beverage CEO Rodney Sacks discussed the benefits that this investment from Coca-Cola will provide:
The partnership deal is expected to close in full by late 2014 or early 2015.
[SOURCE: http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-and-monster-beverage-corporation-enter-into-long-term-strategic-partnership via http://www.buzzfeed.com/sapna/coca-cola-buys-17-of-monster-beverage-underscoring-meteoric#eztepu]