Cans of Monster Energy drinks sit on display at a Sainsbury's store in London, England on August 30, 2018. Jan 13, Reuters - Energy drinks maker Monster Beverage Corp MNST.O is entering the alcoholic drinks market with a $330 million deal for craft beer and hard seltzer producer CANarchy Craft Brewery Collective LLC.
The all-cash deal, announced on Thursday, extends the trend of soft-drink companies branching out to the alcohol space as traditional boundaries between the categories start to blur.
Coca-Cola Co KO.N has partnered with brewer Constellation Brands Inc STZ.N to launch Fresca-branded ready-to- drink cocktails, while PepsiCo Inc PEP.O has partnered with Boston Beer Co SAM.N to launch a Mountain Dew-branded alcoholic beverage.
Monster said the deal would add craft beer brands Cigar City, Oskar Blues, Deep Ellum, Perrin Brewing, Squatters and Wasatch to its portfolio, but it wouldn't exclude CANarchy's restaurants.
Monster, which is the biggest shareholder of Coca-Cola, currently develops and markets energy drinks brands like Full Throttle Energy Drink, Burn Energy Drink and Monster Energy.
The deal is a springboard for Monster into the alcoholic beverage space, said Hilton Schlosberg, co-owner of the Co-Chief Executive.
The acquisition will provide us with a fully in-place infrastructure, including people, distribution and licenses, along with alcoholic beverage development expertise and manufacturing capabilities in the industry, according to Schlosberg.
CANarchy supplies craft beverages throughout the U.S. and 20 countries and U.S. territories and has seven manufacturing facilities and 900 employees, according to its website.
The deal is expected to close in the first quarter of this year.
In November, a source told Reuters that Monster was talking about a merger with Constellation, but the top boss of Corona Extra and Modelo Especial maker said in a conference that the company would only engage in small bolt-on acquisitions. MNST may still need a larger alcohol distribution network, according to RBC Capital Markets Nik Modi, according to the acquisition of CANarchy Craft Brewery.