Coca-Cola Co, Monster Beverage Partnership Deal Closed
Published By : 15 Jun 2015 | Published By : QYRESEARCH
The Coca Cola Company has announced that the previously announced partnership deal with Monster Beverage Corporation has been closed.
As per the long term deal, Coca Cola acquired equity stake of an estimated 16.7 per cent in the energy drink maker for approximately US$ 2.15 billion in cash. The cola giant also transferred the ownership of its worldwide energy drinks unit to Monster Beverage. This global business includes brands such as Relentless and Burn and with this transfer of ownership, Monster has become Coca Cola’s only energy play. Gary P Fayard and Kathy N Waller are the two nominated directors of Coca Cola, who, as announced earlier, will be joining Monster’s board of directors, making a total of 10 members.
Monster Beverage, in return, transferred to Coca Cola its non energy portfolio, which includes Hansen’s Peace Tea and Natural Sodas. The Coca Cola Company is now Monster’s global distribution partner of choice.
Analysts believe that this deal is win-win for both the beverage companies. Considering that Coca Cola’s energy drinks category is performing much better than other beverage companies, gaining a share of the energy drinks market seems to be a wise choice for Coca Cola.
The deal with Monster Beverage will give the company complete access to Coca Cola’s global distribution network. The company will also make the most of the Coca Cola’s addition of energy brands and become a pure energy company. The partnership agreement will also help Monster Beverage in expanding its presence in the global energy drinks market where presently it enjoys a rather limited presence. Most significantly, this deal will give Monster Beverage’s cash position a massive boost.
Coca Cola has also been acquiring equity stake in many other developing companies. The beverage giant owns equity stake amounting to 16 per cent in Keurig Green Mountain Inc., a specialty coffee retailer.