Coca-Cola and Monster have entered into a long-term strategic partnership as the drinks giant looks to further its stake in the energy drink sector and turn Monster into a ‘pure play’ global company.
As part of the agreement, Coca-Cola will acquire a 16.7 per cent ownership in the company with both brands set to benefit from each other’s respective brand marketing, production and distribution strengths.
The transaction, which is expected to close late in 2014 or early in 2015, will also see Coca-Cola transfer ownership of its worldwide energy business, including brands such as Relentless to Monster, while Monster will transfer its non-energy business, including Hubert’s Lemonade and Hansen’s Juice Products to Coca-Cola.
“The Coca-Cola Company continues to identify innovative approaches to partnerships that enable us to stay at the forefront of consumer trends in the beverage industry,” said Muhtar Kent, chairman and CEO of The Coca-Cola Company.
“Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category. This long-term partnership aligns us with a leading energy player globally, brings financial benefit to our company and our bottling partners, and supports broader commercial strategies with our customers to bring total beverage growth opportunities that will also benefit our core business.”
Last month, the drink’s giant suffered a one per cent decline in net revenues for the second quarter, despite recent marketing drives around the World Cup and Share a Coke campaign.