Contrary to reports earlier this week suggesting that Coke were set to buyout Monster, the soft drinks giant has refuted the claims.
“At this time, we are not in discussions to acquire the Monster Beverage Corporation,” Coca-Cola said in a statement.
The rumours circulating over the past three days had led to shares in the Monster company sky-rocketing as much as 26 percent. However, Coca-Cola are now stating that there will not be any further affiliation with Monster beyond the established link they already have with them.
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The current relationship between the two companies exists in a distributing fashion and they also liaise with each other in regards to marketing and commercial ventures. This looks to be the full extent of a partnership for the foreseeable future, however.
“We continue to review the best ways to maximize the value of our relationship,” confirmed Coca-Cola.
Upon the realisation that a transaction was, in fact, unlikely, stocks began to slide once again, dropping a notable 53 cents to US$65 per share.
Despite Coca-Cola’s obvious interest in striking a deal with Monster they are thought to have been put off by the enormity of any prospective takeover.
Even prior to the rumour mill opening up, the value of Monster stood at US$11.2 billion, requiring Coke to blow their previous highest takeover bid out of the water in order to complete a deal.
To entice Monster fully and to factor in a decent premium, a deal would require a bid of well over US$13 billion, topping the US$12 billion acquisition of its North American Bottling operations.
Even more significantly, it would surpass their largest brand takeover by a staggering US$9 billion when they purchased Energy Brands.
Furthermore, the existing partnership between the two companies could also put pay to any future negotiations, with Coke having to factor in the losses it would make in distribution terms, to function fully for Monster instead.