Coke Buys Minority Stake in Monster Energy Drinks

Coca-Cola has bought a minority stake in energy-drink giant Monster, the company announced late Thursday.

Atlanta-based Coke will pay $2.15 billion for 16.7 percent of Monster, the leader in the energy-drink market. Coke will also get two director positions on Monster’s board.

The companies also agreed that Coke will transfer ownership of its energy business – including NOS, Full Throttle and Power Play brands – to Monster, while Monster will transfer its non-energy business – including Hansen’s Natural Sodas, Peace Tea and Hubert’s Lemonade – to Coke.

“This is a big and important deal for Coke,” said John Sicher, editor and publisher of Beverage Digest. “Monster, by volume, leads the energy-drink business in the U.S. Last year, it had a 37.9 share and outperformed the energy-drink category. It is an important and powerful brand.”

Coca-Cola Chief Executive Officer Muhtar Kent said in a statement, “The Coca-Cola Company continues to identify innovative approaches to partnerships that enable us to stay at the forefront of consumer trends in the beverage industry. Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category. 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.”

Rodney C. Sacks, Monster’s chairman and chief executive officer, said: “We gain enhanced access to The Coca-Cola Company’s distribution system, the most powerful and extensive system in the world. At the same time, we become The Coca-Cola Company’s exclusive energy play, with a robust portfolio led by our Monster Energy line and The Coca-Cola Company’s energy brands. Our business will be bolstered by The Coca-Cola Company energy brands we will acquire, providing us with complementary energy-product offerings in many geographies, as well as access to new channels, including vending and specialty accounts.”