ATLANTA -- Coca-Cola is buying a 16.7 per cent 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 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 per cent.
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 U.S. Food and Drug Administration has been investigating reports of deaths linked to energy drinks, although the agency noted the reports don't prove the drinks caused the deaths.
Monster, based in Corona, Calif., has repeatedly said its drinks are safe and it does not know of any fatalities caused by its products.
The deal is the latest move by Coca-Cola to look beyond its own portfolio of Sprite, Dasani, Powerade and other drinks for growth.
Earlier this year, the company also bought a 10 per cent stake in Green Mountain Coffee Roasters Inc. for $1.25 billion.
-- The Associated Press