Coca-Cola Buys $2 Billion Stake in Monster Beverage Corp
The Coca-Cola Company has announced that it will purchase a 16.7 percent equity stake in the Monster Beverage Corporation, giving Coke two seats on Monster’s board of directors, as well as control of Monster’s non-energy beverages: Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade, and Hansen’s Juice Products.
In turn, Monster will take over Coke’s energy drink brands including NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentles.
The deal will allow Coca-Cola to expand its presence to the alternative drinks market as soda sales continue to decline. Meanwhile, Monster will be better able to compete with its primary rival, Red Bull, on a global level, according to industry analysis from IBISWorld.
Furthermore, the exchange will give the Monster Beverage Corporation access to Coke’s superior global distribution model, which Monster called “the most powerful and extensive system in the world.” Coke will also gain access to the successful marketing and promotion team at Monster, the second biggest producer of energy drinks in the United States.
"Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category,” said Muhtar Kent, Chairman and CEO of The Coca-Cola Company.
“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."