Coca-Cola purchases stake in Monster
The Coca-Cola Company will purchase a 16.7 percent equity stake in Monster Beverage Corporation, the second largest producer of energy drinks in the US, the company said Friday.
Under the agreement, Monster will produce its energy drinks while Coca-Cola will take on Monster’s non-energy drink brands Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade and Hansen’s Juice Products.
Coca-Cola says the partnership looks to accelerate both companies growth in the energy drink market.
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.
The transaction is expected to close late in 2014 or early in 2015.