Famous soft drink company Coca-Cola is looking forward to buy a 16.7 percent stake of Monster Beverage Corp as Coca-Cola informed that they will be paying $2.15 billion in cash to the world s biggest soda making company.
According to the agreement Coca-Cola will be transferring their energy business which has Full Throttle and Bum while Coke will be having two board directors on Monster while Coke will be having the non energy business of Monster on their side such as Hansen s natural Soda and Peace Tea.
Monsters will be having coke as their preferred distributor all over the world while Coke will be the only distributor of Monster energy drink.
Coca-Cola will be looking to firm their footings on to the energy drinks market which is a market of around $27 billion but the deal is on the verge when the demand of soda in the developed markets have been decreased.
And according to Coke their biggest market in US which is North America has been doing flat business recently where their brand diet Coke also facing low sales recently.
Meanwhile Monster will be having the access of worldwide distribution through Coke and Monster will be pushing to expand their business not only in US and Canada but also in the other parts of the world. And according to the CEO of Monster he said that it will be a win-win strategy for both the companies.
This deal for Monster will certainly help them to boost their business globally where the Monster who does not have their presence in the markets of China and Russia and they will also be looking to enter into the market of Brazil and this deal allows the firm to enter into such markets. And just after the news of the agreement spread the shares of Coca Cola increased to 1.2 percent however the share price of Monster declined 22 percent in the stock market.