Coca-Cola (NYSE:KO) is acquiring a 16.7% stake in Monster Beverage (NASDAQ:MNST) as part of a strategic alliance. Coke will make a $2.15B net cash payment to Monster at the time of the deal's closing, which is expected in late 2014 or early 2015.
As part of the deal, Monster will transfer its non-energy businesses to Coke, and "enter into expanded distribution agreements." Monster will transfer its Hansens Natural Sodas, Peace Tea, Huberts Lemonade and Hansens Juice Products brands, among others.
At the same time, Coke will "transfer ownership of its worldwide energy business, including NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless," to Monster.
Coke will have two directors on Monster's board. The partnership follows Coke's February deal with Keurig Green Mountain. Coke: "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: "Our agreement enables us to focus on our core energy business, while leveraging the strength of The Coca-Cola Companys powerful distribution and bottling system on a worldwide scale."
MNST +25.6% AH.