Monster Beverage Essay

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Article: Coca-Cola Company deal with Monster Beverage Corp is going to affect beverage industry. Date: 18 August 2014 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. 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 …show more content…

In soft drink market, there are only two major competing firms namely, Pepsi Co and Coca-Cola. Pepsi-Co has an energy drink brand namely Gatorade which it acquired by purchasing Quaker Oats Company. Gatorade had a huge brand following which is why Pepsi-Co completely acquired Quaker. Same way, Coca-Cola is trying to do the same with Monster Beverage Cooperation, which too has a strong brand following. Rather than building up a brand from scratch, major companies acquire known brands. As soda sales are slumping, soda majors need to diversify their portfolio and meet changing customer

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