Coca-Cola buys full management of Bodyarmor for $5.6 billion

Coca-Cola introduced Monday it has purchased full management of sports activities drink maker Bodyarmor for $5.6 billion, making it the corporate’s largest acquisition up to now.

The beverage big purchased a 15% stake in Bodyarmor in 2018, turning into its second-largest shareholder. On the time, basketball legend Kobe Bryant was its third-largest shareholder after investing in Bodyarmor in 2013, simply two years after its founding. Bryant’s property will obtain greater than $400 million from the sale, in accordance with the Wall Road Journal.

The deal for the remaining 85% of Bodyarmor is not solely sudden. Coke first stated in February that it meant to purchase a controlling curiosity in Bodyarmor later this 12 months in a pre-acquisition submitting with the Federal Commerce Fee.

Proudly owning Bodyarmor helps Coke acquire market share within the sports activities drink class, though PepsiCo’s Gatorade is much and away the market chief with roughly 70% market share. By positioning itself as a more healthy sports activities drink, Bodyarmor has surpassed Coke’s Powerade to grow to be the second-largest participant within the class. In accordance with Coke, the sports activities drink model’s retail gross sales are greater than $1.4 billion, up about 50% this 12 months.

As a part of the deal, Bodyarmor co-founder Mike Repole will collaborate on the corporate’s nonetheless drinks portfolio. Repole additionally based Vitaminwater, Smartwater and Vitality Manufacturers, all of which at the moment are owned by Coke. Repole and BodyArmor President Brent Hastie may even stick round to assist Bodyarmor in its quest to overhaul Gatorade.

Forward of the deal’s affirmation, Credit score Suisse analyst Kaumil Gajrawala wrote in a word to purchasers Friday that he expects the acquisition shall be constructive for Coke, citing Physique Armor’s model fairness and the potential for Coke to distribute its sports activities drinks globally, prefer it did for Monster.

Coke has been overhauling its personal portfolio because the begin of the pandemic, killing off drinks that have not been promoting nicely. That features its short-lived Coca-Cola Plus Vitality drink in North America this spring. On the similar time, underneath CEO James Quincey, the corporate has been striving to supply a wider array of drinks.

The Bodyarmor deal is Coke’s largest acquisition, topping its buy of Costa Espresso in 2018 for $5.1 billion.

Shares of Coke have risen 3% this 12 months, giving it a market worth of $244 billion.