Shares in energy drinks maker Monster soared in after-hours trading after Coca Cola acquired a 16.7 per cent stake in the company.
As part of the deal, Coca Cola will make a net cash payment of $2.15 billion (£1.3bn) and transfer its worldwide energy business to Monster. In exchange, Monster will transfer its non-energy business, including Peace Tea and Hubert's Lemonades drinks, to Coca Cola.
Shares in Monster jumped more than 30 per cent after the deal, which is subject to regulatory approval, was announced. Shares in Coca Cola, the world's biggest beverage company, climbed 1.2 per cent as traders reacted to the announcement, which was hailed by chairman and chief executive Muhtar Kent as a "compelling" opportunity for both shareholders.
He added: "This long-term partnership aligns us with a leading energy player globally, brings financial benefit to our company and our bottling partners, and supports broader commercial strategies with our customers to bring total beverage growth opportunities that will also benefit our core business."
Coca Cola has an option to buy up to 25 per cent of the company as it seeks to expand its presence in the fast growing energy drinks market. Monster is one of the world's biggest energy drinks companies, only second to Red Bull, which continues to dominate the market.Reuse content