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Coca-Cola bets on energy drinks with Monster stake

Published on NewsOK Modified: August 14, 2014 at 5:11 pm •  Published: August 14, 2014
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ATLANTA (AP) — Coca-Cola is buying a 16.7 percent stake in Monster Beverage for $2.15 billion, with the world's biggest soda maker hoping to benefit from the surging popularity of energy drinks.

The Atlanta-based company said Thursday it will also place two directors on Monster's board as part of the deal.

Analysts had suggested for some time that Coca-Cola might acquire Monster at a time when its flagship soda business is flagging in developed markets such as the United States. Monster Beverage Corp., meanwhile, has cultivated a loyal fan base in part by focusing its marketing on skateboarding, snowboarding and other sports events.

When asked during a conference call with reporters whether Coca-Cola had pursued acquiring all of Monster, CEO Muhtar Kent said, "I wouldn't want to comment on that."

He noted the company has the option to increase its stake to 25 percent.

As energy drink makers have enjoyed growth in recent years, they've also been the subject of criticism and controversy over marketing tactics and the caffeine levels in their products. The Food and Drug Administration has been investigating reports of deaths linked to energy drinks, although the agency noted that the reports don't prove the drinks caused the deaths.

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