August 14, 2014

Coca-Cola takes a big gulp of Monster

Coca-Cola is getting an extra-big dose of caffeine.

The company announced Thursday it is buying a 17% stake in Monster, the energy drink company, and that the two will swap ownership of some brands.

The $2.15 billion deal will allow each company to focus on its core strengths.

For example, Coca-Cola will hand Monster its energy drink brands, like NOS and Full Throttle. In exchange, the non-energy drinks that Monster produces -- Hansen's Natural Sodas, Peace Tea, Hubert's Lemonade and Hansen's Juice Products -- will become part of Coca-Cola's portfolio.

A deal between the two companies has been rumored for some time, with Coca-Cola trying to reposition itself as Americans consume less soda. Coca-Cola's soft drink production slumped by about 2% last year, while Monster grew by nearly 7% to become the sixth-largest player in the carbonated beverages space, according to data from Beverage Digest.

The deal also expands Monster's access to Coca-Cola's distribution network. The two have partnered in this area for about six years.

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