This $2.15bn move has been expected for a while and comes at a time when Coca-Cola’s US carbonated soft drinks sales are in decline, yet Monster’s US energy drinks sales are growing.
The partnership is aimed at accelerating sales in the energy drinks sector, where Monster has the leading position in the US. Coca-Cola already distributes Monster products and will become Monster’s primary distribution partner. The deal also sees it handing its own global energy drinks portfolio over to Monster, including NOS, Full Throttle, Burn, Mother, Play & Power Play and Relentless.
Could this deal help Monster catch up Red Bull outside the US?
On the flip side, Monster is going to transfer its non-energy brands, including Hansen’s Natural Soda and Peace Tea, Hubert’s Lemonade and Hansen’s Juice Products to Coca-Cola.
Looking to the future, in a conference call, Coca-Cola CEO Muhtar Kent declined to say if the company intended to buy more, or even all, of Monster. He did say that Coke has an option to increase its ownership to 25%.
During the conference call, Monster CEO Rodney Sacks also declined to say if he considered, or would consider, selling all of Monster to Coke: “What will be will be,” he said. “We’re still having fun and enjoying running the company.”
Having fun can be rewarding, too! The deal instantly creates two Monster billionaires: CEO Rodney Sacks and president Hilton Schlosberg. A recent SEC filing shows Sacks owning 18.43 million shares in Monster, while Schlosberg has 18.3 million.
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