Coke Energizes Monster

Investment, realignment brings more energy brands to Monster, Hansens to Coke

Coca-Cola Monster (CSP Daily News / Convenience Stores / Beverages)

ATLANTA & CORONA, Calif. -- In an effort to align long-term interests, The Coca-Cola Co. will acquire an approximately 16.7% ownership interest in Monster Beverage Corp., and the companies have entered into an agreements for a long-term strategic partnership that they expect will accelerate growth for both companies.

To optimally align product portfolios and enable those portfolios to benefit from each company's respective brand marketing, production and distribution strengths and to optimize the companies' capital and resource allocation, Coca-Cola will transfer ownership of its worldwide energy business, including NOS, Full Throttle, Burn, Mother, Play and Power Play and Relentless to Monster, and Monster will transfer its non-energy business, including Hansens Natural Sodas, Peace Tea, Huberts Lemonade and Hansens Juice Products, to Coca-Cola.

The partnership strategically aligns both companies by combining the strength of Coca-Cola s worldwide bottling system with Monsters' focus and expertise as a leading energy player globally.

As reported in a 21st Century Smokes/CSP Daily News Flash, Coca-Cola and Monster will amend their current distribution agreement in the United States and Canada by expanding into additional territories and entering into long-term agreements. Coca-Cola will become Monsters' preferred distribution partner globally and Monster will become Coca-Cola's exclusive energy play.

Coca-Cola will make a net cash payment of $2.15 billion and transfer its worldwide energy business to Monster. In exchange, Monster will issue to Coca-Cola the shares of Monster common stock, transfer its non-energy business to Coca-Cola and enter into expanded distribution arrangements.

The transaction, which the companies expect to close late in 2014 or early in 2015, is subject to customary closing conditions, including receipt of regulatory approvals.

"We gain enhanced access to The Coca-Cola Co.'s distribution system, the most powerful and extensive system in the world. At the same time, we become The Coca-Cola Co.'s exclusive energy play, with a robust portfolio led by our Monster Energy line and The Coca-Cola Co.'s energy brands," said Rodney C. Sacks, chairman and CEO of Monster.

"Our business will be bolstered by The Coca-Cola Co. energy brands we will acquire, providing us with complementary energy product offerings in many geographies, as well as access to new channels, including vending and specialty accounts."

"Our agreement enables us to focus on our core energy business, while leveraging the strength of The Coca-Cola Co.'s powerful distribution and bottling system on a worldwide scale," said Hilton H. Schlosberg, Corona, Calif.-based Monster's vice chairman and president. The goals of both companies' management teams are further aligned, with a great enhancement to Monsters position as one of the world's leading energy beverage companies."

Coca-Cola, Atlanta, is the world's largest beverage company, with more than 500 sparkling and still brands. Led by Coca-Cola, one of the world's most valuable and recognizable brands, our Company's portfolio features 17 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle.