Coca-Cola to Acquire Glaceau (Vitaminwater) for $4.1B

Cola-Cola announced it has agreed to purchase privately held Energy Brands, Inc., known as glacéau, the maker of vitaminwater and other enhanced water beverages. The $4.1 billion acquisition will be in cash and is expected to close this summer, subject to customary approvals. Coke said it will be accretive to EPS in its first full year. Shares of Coca-Cola lost 0.2% to $51.24 on Thursday, but gained 0.6% to $51.57 in after-hours activity and are moving to the upside (+1.1% to $51.80) in thin pre-market trading. Bloomberg mentions Energy Brands controls about 30% of the U.S. flavored water market. An asset manager at Greenwood Capital commented, "This is the position Coke's in, having to pay up because there are so few assets out there that can move the needle for them. Coke needs Glaceau." India's Tata Group owns a 30% stake in Energy Brands, which it will sell to Coke for $1.2b -- nearly doubling its investment in less than a year.

Sources: Press release, Bloomberg, MarketWatch
Commentary: Coca-Cola in Talks to Acquire Stake in Glaceau • Coke Beats by a Penny, Shares Trading Higher • Seven Great Ways to Invest in Coca-Cola
Stocks/ETFs to watch: Coca-Cola Co. (KO). Competitors: Cadbury Schweppes plc (CSG), PepsiCo, Inc. (PEP), Hansen Natural (HANS), Jones Soda (JSDA), Cott (COT), National Beverage (FIZ). ETFs: Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), Vanguard Consumer Staples (VDC)
Conference call transcripts: Coca-Cola Q1 2007, PepsiCo Q1 2007

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.