Boston, MA 08/15/2014 (wallstreetpr) – The Coca-Cola Company (NYSE:KO) is busy making significant plans in expanding its presence in the beverage world. Going few months back, it had announced that it will acquire Green Mountain Coffee. Taking a step further, it has said that will get 16.7% stake in Monster Beverage Corp (NASDAQ:MNST). The stake is valued at $2.15 billion.
The deal
Coke has plans to acquire a 16.7% stake in Monster for which it will pay $2.15 million in net cash. It will also be eligible to get the two seats in Monster’s Board of Directors. Coke will get the shares of Monster’s common stock. The coming together of two companies will help them to align their product portfolio. It will enhance their distribution abilities.
In the deal, Coke will also give the ownership of its energy business to Monster. It will include the drinks like Burn, Full Throttle and Power Play. At the same time, Monster will give its non-energy business to Coco-Cola. It will include the drinks like Peace Tea, Hansen’s Natural Sodas and Hubert’s Lemonade.
The objectives
Muhtar Kent, Chairman and the CEO of Coke, said that the new stake is a way to enhance its participation in global beverage world. Monster has remained an integral part of Coca-Cola’s global system since 2008. Monster has got the experienced and proven entrepreneurial culture. The association will lead to an increased value for Coke and its shareholders.
Monster said that it was delighted to be a part of the new deal where is will access to the distribution streams. It will be the exclusive energy play for Coke. The strong portfolio of Coke and Monster will provide new expansion channels in various geographies in the world. It will accelerate the pace of growth internationally. The stake purchase is expected to close by late 2014 or maximum in early 2015.
