Ryan Blaney, driver of the #12 BodyArmor Ford, celebrates within the Ruoff Mortgage victory lane after profitable the NASCAR Cup Collection Coke Zero Sugar 400 at Daytona Worldwide Speedway on August 28, 2021 in Daytona Seaside, Florida.
Jared C. Tilton | Getty Photographs
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 to this point.
The beverage big purchased a 15% stake in Bodyarmor in 2018, changing 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, according to the Wall Street Journal.
The deal for the remaining 85% of Bodyarmor is not totally sudden. Coke first stated in February that it meant to purchase a controlling curiosity in Bodyarmor later this yr in a pre-acquisition submitting with the Federal Commerce Fee.
Proudly owning Bodyarmor helps Coke achieve 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 change into the second-largest participant within the class. In response to Coke, the sports activities drink model’s retail gross sales are greater than $1.4 billion, up about 50% this yr.
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 Power Manufacturers, all of which at the moment are owned by Coke. Repole and BodyArmor President Brent Hastie can 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 observe to shoppers Friday that he expects the acquisition will likely be optimistic 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 own portfolio because the begin of the pandemic, killing off drinks that have not been promoting properly. That features its short-lived Coca-Cola Plus Power drink in North America this spring. On the identical time, below 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 yr, giving it a market worth of $244 billion.
