Shares of Monster Beverage Corp (MNST) surged over 20% in premarket trading on Friday morning following reports that The-Coca-Cola Company (KO
) will acquire a 16.7% stake in the company.
Coca-Cola has agreed to purchase a 16.7% stake in the beverage company for $2.15 billion. With this partnership, Coca-Cola will transfer its energy based beverages including NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless to Monster. The deal will also include Monster transferring its non-energy based beverages including Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade and Hansen’s Juice Products to Coca-Cola.
This deal is in-line with KO’s plan to diversify its product range as soda sales continue to decline. KO’s CEO Muhtar Kent commented: “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.”
Monster Beverage Corp (MNST) shares were up $14.83, or 20.70% during premarket trading Friday. The stock is up 5.73%.
The Coca-Cola Company shares were up 72 cents, or 1.79% during premarket trading Friday. The stock is down 2.74% YTD.
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