The Coca-Cola Company and Monster Beverage Corporation have closed on the previously announced agreement which gives Coca-Cola a minority ownership in the popular energy drink company.
Coca-Cola sent $2.15 billion in cash and ownership of its worldwide energy business—including NOS, Full Throttle, Burn, Mother, BU, Gladiator, Samurai, Nalu, BPM, Play and Power Play—to Monster in exchange for 16.7 percent stake in the company and Monster’s non-energy business such as Hansen’s Natural Sodas, Peace Tea and Hubert’s Lemonade.
According to Coca-Cola, since the transaction was announced “Monster and The Coca-Cola Company and its bottlers have amended their distribution arrangements in the US and Canada by expanding into additional territories and entering into long-term agreements. The Coca-Cola Company also has become Monster’s preferred global distribution partner with new international distribution commitments already in place with bottlers in Germany and Norway.”
According to business intelligence publisher IBISWorld, Monster currently has a 28.7 percent market share of the $6.8 billion Energy Drink Production industry.
IBISWorld said the deal hits the strengths of both companies and is likely to boost business for Coca-Cola which is looking to diversify its beverage portfolio amid dropping soda sales.
IBISWorld added energy drink production is outperforming the soda industry throughout the past five years and is projected to grow 9.7 percent per year to 2019.