This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Coca-Cola Gulps Down Stake in Monster for $2.2B

NEW YORK (The Deal) -- Coca-Cola (KO) said Thursday it will take a 16.7% equity stake in Monster Beverage (MNST) in a $2.15 billion deal that means Monster will become the beverage giant's exclusive offering in the fast-growing energy drinks segment.

The news sent Monster's stock up nearly 20% to $85.35 per share in after hours trading. It closed the day up under 1% to $71.65 giving it a market capitalization of nearly $12 billion.

In addition to a $2.15 billion cash investment, Coca-Cola will transfer its entire energy drink portfolio, which includes NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless over to Monster.

Monster, in turn, will hand over its non-energy brands consisting of Hansen's Natural Soda and juice products, Peace Tea, and Hubert's Lemonade to Coca-Cola.

The Corona, Calif.-based energy drink maker will additionally benefit from Coca-Cola's massive bottling and distribution system globally.

Coca-Cola, of Atlanta, will hold two of Monster's board seats as part of the long-term partnership.

The transaction is expected to close in late 2014 or early 2015 pending regulatory approval.

"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," said Rodney Sacks, Monster's CEO and chairman, in a statement.

"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," said Muhtar Kent, CEO and chairman of Coca-Cola, in a statement.

It is the second partnership Coca-Cola has inked this year. In February, the Atlanta-based company gulped down a 10% stake in Keurig Green Mountain Inc. for about $1.25 billion.

The partnership with Keurig Green Mountain was part of a 10-year agreement to develop and sell Coca-Cola's portfolio of brands for use in Keurig Green Mountain's Keurig-branded home appliance for making cold beverages.

Barclays' Wilco Faessen and Christopher Diorio provided financial advice to Monster, while Jones Day's Rob Profusek, Andew Levine, David Wales, Ken Field, Ed Kennedy and Schulte Roth & Zabel LLP's Eric Piesta provided the company with legal advice.

Martha McGarry, Thomas Greenberg and Peter Serating of Skadden, Arps, Slate, Meagher & Flom LLP provided legal advice to Coca-Cola.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs