Actionable insights straight to your inbox

Equities logo

Coca-Cola Acquires Full Ownership of Bodyarmor for $5.8 Billion

The deal is Coca-Cola's largest ever brand acquisition.

Video source: YouTube, CNBC Television

The Coca-Cola Company (KO) has acquired full ownership of premium sports drink maker BodyArmor Sports Nutrition in its largest ever brand acquisition.

Bloomberg News reported last week that a deal was imminent based on confidential sources.

In 2018, Coca-Cola bought a 15% stake in BodyArmor for an undisclosed amount and became the brand’s second largest shareholder. Under the terms of that deal, Coca-Cola was given the opportunity to fully acquire the company in the future.  

The beverage giant announced Monday that it is paying $5.8 billion in cash for the remaining 85% of BodyArmor.

Additionally, the company said it would collaborate with BodyArmor co-founder Mike Repole on Coca-Cola's still beverages portfolio. CNBC noted that Repole also founded Vitaminwater, Smartwater and Energy Brands, all of which are now owned by Coca-Cola.

Since its 2011 launch, BodyArmor has evolved into a top challenger to Gatorade, though PepsiCo’s iconic beverage remains the market leader in sport drink and hydration, with about 70% market share in the $40 billion category. 

The brand, which is backed by several high-profile athletes including Naomi Osaka, Mookie Betts, Mike Trout and James Harden, said it has grown to become the No. 2 sports drink nationwide.

Coca-Cola said that Bodyarmor is growing "at about 50%" and has retail sales of "more than $1.4 billion."

As Coca-Cola looks to expand its portfolio beyond its popular soda brands, the Atlanta-based company has turned to acquisition.

Its biggest moves include acquiring Topo Chico premium sparkling mineral water, launching the first Coke-branded energy drink, spending $5.1 billion to purchase Costa Coffee and scooping up the remaining stake in Fairlife milk.     

At the same time, the company has sold or ended production of Zico coconut water, Tab soda and Odwalla juice as part of a wider plan to eliminate an estimated 200 brands globally to focus on more profitable, faster-growing products coming out of the COVID-19 pandemic. 

The beverage giant also discontinued its own Coca-Cola Energy drink in North America in May, but retained its majority stake in Monster Beverage Corp, one of the top energy drink makers in the US.


Source: Equities News

Why have three of the most successful men in Silicon Valley decided to branch out from computing and into nuclear energy?