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Around $2.15 billion would be paid by Coca-Cola for a 16.7 percent stake in MNST or Monster Beverage, as per the announcement of the company on Friday. This move of Coca-Cola for joining forces with the Monster is among the various moves that have been made by the soda giant for diversification of business, as there is a decline in the sales of soft drinks in United States.
A buzz is being created in the energy drink business by this company, which is the largest soda company in the world. In a blockbuster deal, around $2.15 billion would be paid in cash for a 16.7 percent stake in Corona, California based energy Drink Company. As per the terms and conditions of the deal, there would be 2 members of Coca-Cola on the board of Directors of Monster.
Innovative approaches would be constantly identified by the company for partnerships through which the company can stay in forefront of consumer trends in the industry of beverages, says the CEO and Chairman of Coca-Cola Company, Muhtar Kent. He further said that their investment in Monster is an efficient way of bolstering the participation in attractive and fast-growing category of global energy drinks.
In this deal, Coca-Cola would be given non-energy brands that include Peace Deal, Hubert’s Lemonade and Hansen’s Natural Soda. In return, Monster would get the ownership of various energy drink brands like Mother, Burn, Full Throttle and NOS.
It was also stipulated by this deal that the stake in Monster can be increased by Coca-Cola to 25 percent in next 4 years through open market purchases. However, the 25 percent mark cannot be surpassed by Coca-Cola without the approval of Monster.
This transaction is definitely a unique opportunity for Monster as well as its shareholders.