Energy drinks M&A: Monster Beverage closes in on deal for rival Bang
Justin Sullivan
Monster Beverage Corporation (NASDAQ:MNST) is close to acquiring energy drink maker Bang Energy out of bankruptcy for $362M, according to a court filing in the U.S. District Bankruptcy Court in Florida. The bid is inclusive of a $25M deposit and the assumption of liabilities.
Bang Energy maker Vital Pharmaceuticals said a proposed sale to Monster Beverage (MNST) is supported by major lenders and represents a viable path to repaying its creditors. However, there is a regulatory hurdle to clear, with the Federal Trade Commission indicating it will require more information as part of the deal review process.
Bloomberg reported Bang could be forced to liquidate unless the FTC grants early termination of the review because Monster requires a closing date by August 3, and financing for the bankruptcy case matures in just days.
Sector watch: A recent batch of Nielsen data showed energy drink sales were up 13.1% over the last four-week tracking period in comparison to a year ago and were 12.5% higher over the last 12 weeks. Pricing contributed to much of the energy drinks growth, but volume has held up better than other foods and beverage categories amid the economic headwinds. Monster Beverage (MNST) had 37% market share and Red Bull claimed 35% market share. Celsius Holdings (CELH) held 7% share and PepsiCo (PEP) brands claimed 5%. Bang's market share declined down to 2% amid the bankruptcy proceedings of the parent company. As a whole, energy drink sales continue to outpace soda sales and alcoholic beverage sales.
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