Coca-Cola is continuing to look for growth opportunities outside the fizzy drinks market after purchasing a stake in energy drink Monster Beverage.
The US drinks company has paid $2.15 billion (£1.3 billion) for a 16.7 per cent stake in Monster. It will involve Coca-Cola transferring its worldwide business to the organisation. As part of the agreement Monster will relocate its non-energy business, including Peace Ta and Hansen's Natural Sodas, to Coca-Cola.
Both parties are in agreement that it helps to better-align each of their product portfolios and distribution abilities. It allows Coca-Cola to expand into different markets by having a stake in Monster's energy products such as Full Throttle, Burn and Power Play. It has provided a significant boost for Monster with shares in the company jumping 22 per cent following the news. Coca-Cola improved by 1.2 per cent.
Monster and Coca-Cola are hoping the transaction is completed by the start of next year but it is subject to regulatory approvals. It provides an opportunity for Coca-Cola to move away from the fizzy drinks market and provide customers with a different product from their wide range.
Muhtar Kent, chairman and chief executive officer of The Coca-Cola Company, said: "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.
"Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category."
As consumers become more health conscious, Coca-Cola has had to change its tactics when it comes to mass marketing. The company recently announced that it would continue to use natural sweetener stevia in its Glaceau Vitaminwater in the water.
It had been forced to alter the recipe for its US market following criticism from customers on Facebook but maintained that it would not change its UK version.
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