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Coca-Cola Completes $2.15B Purchase of Monster Beverage

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The Coca-Cola Company has completed its $2.15 billion purchase of the Monster Beverage Corporation that was put into motion August 2014. Effective immediately, Coca-Cola now owns an approximate 16.7-percent stake in Monster.

Under terms of the deal, Coco-Cola Co. transferred ownership of its worldwide energy business, including NOS, Full Throttle, Burn, Mother, BU, Gladiator, Samurai, Nalu, BPM, Play and Power Play, and Ultra and Relentless, to Monster, and gained two seats on Monster’s board of directors. In return, Monster transferred its non-energy business, including Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade and Hansen’s Juice Products, to Coca-Cola

Since the transaction was announced, Monster and Coca-Cola and its bottlers have amended their distribution arrangements in the United States and Canada by expanding into additional territories and entering into long-term agreements. Coca-Cola Co. also has become Monster’s preferred global distribution partner with new international distribution commitments already in place with bottlers in Germany and Norway.

The deal comes at a time when the global energy drink sector is experiencing rapid growth, while the global soft drink industry is feeling the pinch as consumption declines. In 2013, carbonated soft drink (CSD) sales declined for the eighth straight year, while energy drink sales soared in volume. Per capita consumption of CSDs fell to the lowest level since 1987, and total sales volume dropped to levels not seen since 1996. Per capita consumption in the United States fell to 701 8-ounce servings in 2012, from 714 in 2011 and 728 in 2010.

The deal also in line with Coca-Cola’s strategy to branch out from its soft drink roots into other beverage sectors. In February 2014, Coca-Cola purchased $1.25 billion in stock from Green Mountain Coffee Roasters, Inc., and signed a $1.25 billion 10-year agreement to collaborate on the launch of Keurig’s new cold beverage platform. Under the agreement, GMCR will be Coca-Cola’s exclusive partner for the production and sale of The Coca-Cola Company-branded single-serve, pod-based cold beverages. The companies also will explore other future opportunities to collaborate on the Keurig platform.

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