How The Coca-Cola Company (KO)’s Deal With Monster Beverage Corp (MNST) is Going to Affect the Beverage Industry

The Coca-Cola Company (NYSE:KO) recently acquired a 16% stake in Monster Beverage Corp (NASDAQ:MNST), with a total value of over $2 billion. On Monday, CNBC‘s  ’Nightly Business Report’ (NBR) has presented some insight on the deal between The Coca-Cola Company (NYSE:KO) and Monster Beverage Corp (NASDAQ:MNST) and discussed how it is going to affect competitors.

Coca-Cola KO Bottle

“Pepsi has a partnership with Rockstar, which has been a distant, distant number three player to Redbull and Monster Beverage Corp (NASDAQ:MNST) and so there wasn’t really much they could do to catch up other than to continue to support that or try other things like Mello Yello or another kind of quasi energy drinks. So, I am not really sure that Pepsi will react that much to this one as they would for other type of announcements,” William Chappell, analyst at Suntrust Robinson Humphrey, said.

As soon as the news of the deal was out Monster Beverage Corp (NASDAQ:MNST)’s shares rocketed above $90 from the $70 levels they were trading a day before. The Coca-Cola Company (NYSE:KO) is hoping to spur its growth with the Monster Beverage Corp (NASDAQ:MNST) deal as the company is witnessing a continuous decline in soft drinks, which make up 70% of its business. Monster Beverage Corp (NASDAQ:MNST) will also get a significant advantage from the deal as it will take the ‘Monster’ brand of energy drinks to Russia and China, where it doesn’t have a presence.

The Coca-Cola Company (NYSE:KO) would be paying Monster Beverage Corp (NASDAQ:MNST) $2.15 billion in cash for the stake in the company. With this deal, The Coca-Cola Company (NYSE:KO) gets access to $27 billion a year energy drinks market, which is growing much faster than its conventional soda business.

“This deal, expected to close by early 2015 does have its risks. Most notably, increased energy drinks regulations as The Coca-Cola Company (NYSE:KO) faces lawsuits tied to its advertising practices and injuries allegedly caused by its products,” Morgan Brennan, CNBC correspondent, said.

Disclosure: None

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!