Market Overview

Coca-Cola to Buy Monster?


According to several analysts Benzinga spoke to earlier today, Coca-Cola (NYSE: KO) could have its sights on Monster Beverage Corporation (NASDAQ: MNST) in an acquisition that could go down as the largest ever for the soft beverage giant.

Jack Russo, of Raymond James, stated that Coke might be planning to buy the energy drink maker. He said that if that were to be the case, investors should look for Coke to begin selling off some of its bottling assets to raise money for such an acquisition. Still, he noted that if Coke were to consider such a move, it may draw fire from its own shareholders, as it would have to pay a "king's ransom" to purchase Monster.

Currently, shares of Monster Beverage are trading up over 2% on the session, just over $65 per share. With a market cap of over 11 billion dollars, and assuming some premium, the purchase would be the largest ever in Coca-Cola's history. Given the size of the deal, investors may be skeptical of the possibility.

Still, energy drinks remain one the fastest growing sectors of the beverage market, and Coke's attempt to enter the market with its own Full Throttle has proven to be a failure.

Benzinga spoke to another analyst on possibility, but he declined to comment on the record as he was not authorized to speak on the matter.

"Yes, the price Coke would have to pay for Monster would be the biggest hang-up," he stated. "Still, Coke wants to be a bigger presence in the energy drink market and they already have a fairly close distribution relationship with Monster. The move would be elevating that to the next level. They could do it, but they would really have to be excited about Monster's growth prospects."

Shares of Coca-Cola are currently trading near $76, up over 1% on the session.

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