<p><em><strong>By Ed Hammond</strong></em></p>.<p>Monster Beverage Corporation, the maker of energy drinks, is exploring a combination with Corona brewer Constellation Brands Incorporated, according to people familiar with the matter.</p>.<p>Monster Beverage, which has Coca-Cola Company as a major shareholder, has discussed a potential deal with advisers, said the people, who asked not to be identified as the deliberations are private.</p>.<p>Considerations may not lead to a transaction between Monster Beverage, which has a market value of $47 billion, and Constellation Brands, which is worth $44 billion. The exact structure of a potential tie-up couldn’t be immediately learned and it’s unclear whether discussions will lead to a full merger or asset deal. </p>.<p><strong>Also read — <a href="https://www.deccanherald.com/business/coca-cola-to-buy-out-sports-drink-brand-bodyarmor-report-1046192.html" target="_blank">Coca-Cola to buy out sports drink brand BodyArmor: Report</a></strong></p>.<p>Any transaction with Constellation would require the support of the Sands family, which has built the company into a global beverages player, the people said. A spokesperson for Constellation Brands declined to comment, and a representative for Monster Beverage couldn’t be immediately reached for comment. </p>.<p>Both companies’ stocks have underperformed the 25% jump in the Standard & Poor’s 500 Stock Index in 2021. Constellation shares closed November 19 at $235.40, for a gain of 7.5% so far this year, while Monster shares were at $89.30 for a year-to-date decline of 3.4%. </p>.<p><strong>Coca-Cola Stake</strong><br />Monster’s relationship with Coca-Cola may pose a sticking point, said Kenneth Shea, senior analyst for beverage and tobacco companies at Bloomberg Intelligence. </p>.<p>“I see such a transaction, if effected, as jeopardizing Monster’s exclusive distribution agreement with Coca-Cola, which could derail its international growth ambitions,” Shea said. </p>.<p>“I see little synergy between these two companies, as regulators would not welcome drinks that combine caffeine and alcohol,” Shea added. “The products produced would have to leverage their respective brands but be mindful of the limitations with product formulations.”</p>.<p>Coca-Cola didn’t immediately return a message seeking comment.</p>.<p><strong>Drink Deals</strong><br />Constellation Brands, which is based in Victor, New York, started as a wine producer in 1945. It now sells Corona Extra and Modelo Especial in the US as well as Casa Noble tequila, Svedka vodka and High West whiskey.</p>.<p>A deal between Constellation and Monster could be interesting for the category of cannabis-infused beverages. Monster was said to be considering CBD or hard seltzer categories, but there are concerns that could tarnish the company’s image. </p>.<p>Constellation has a stake of almost 40% in Canopy Growth, a Canadian marijuana company. Canopy sells drinks with THC in Canada, and aims to sell them in the US if marijuana becomes federally legal.</p>.<p><strong>Also read — <a href="https://www.deccanherald.com/national/east-and-northeast/judima-wine-becomes-first-beverage-from-northeast-to-get-gi-tag-1034571.html" target="_blank">Judima wine becomes first beverage from Northeast to get GI tag</a></strong></p>.<p>Monster Beverage, earlier this month, reported record third-quarter net sales, despite supply-chain challenges, including securing aluminium cans amid the pandemic. </p>.<p>If the talks are successful, it would be the latest beverage deal since Coca-Cola agreed to acquire the remaining stake that it doesn’t own in sports-drink brand BodyArmor for $5.6 billion in cash earlier this month. </p>.<p>Other alcohol deals could be on the way. Private equity firm Sycamore Partners is also weighing a sale of Stag’s Leap Wine, potentially worth $1 billion, Bloomberg News previously reported. </p>.<p>Sycamore purchased the brand as part of its acquisition of Ste Michelle Wine Estates from Altria Group Incorporated in a $1.2 billion deal that closed in October.</p>.<p><strong>Watch the latest DH Videos here:</strong></p>
<p><em><strong>By Ed Hammond</strong></em></p>.<p>Monster Beverage Corporation, the maker of energy drinks, is exploring a combination with Corona brewer Constellation Brands Incorporated, according to people familiar with the matter.</p>.<p>Monster Beverage, which has Coca-Cola Company as a major shareholder, has discussed a potential deal with advisers, said the people, who asked not to be identified as the deliberations are private.</p>.<p>Considerations may not lead to a transaction between Monster Beverage, which has a market value of $47 billion, and Constellation Brands, which is worth $44 billion. The exact structure of a potential tie-up couldn’t be immediately learned and it’s unclear whether discussions will lead to a full merger or asset deal. </p>.<p><strong>Also read — <a href="https://www.deccanherald.com/business/coca-cola-to-buy-out-sports-drink-brand-bodyarmor-report-1046192.html" target="_blank">Coca-Cola to buy out sports drink brand BodyArmor: Report</a></strong></p>.<p>Any transaction with Constellation would require the support of the Sands family, which has built the company into a global beverages player, the people said. A spokesperson for Constellation Brands declined to comment, and a representative for Monster Beverage couldn’t be immediately reached for comment. </p>.<p>Both companies’ stocks have underperformed the 25% jump in the Standard & Poor’s 500 Stock Index in 2021. Constellation shares closed November 19 at $235.40, for a gain of 7.5% so far this year, while Monster shares were at $89.30 for a year-to-date decline of 3.4%. </p>.<p><strong>Coca-Cola Stake</strong><br />Monster’s relationship with Coca-Cola may pose a sticking point, said Kenneth Shea, senior analyst for beverage and tobacco companies at Bloomberg Intelligence. </p>.<p>“I see such a transaction, if effected, as jeopardizing Monster’s exclusive distribution agreement with Coca-Cola, which could derail its international growth ambitions,” Shea said. </p>.<p>“I see little synergy between these two companies, as regulators would not welcome drinks that combine caffeine and alcohol,” Shea added. “The products produced would have to leverage their respective brands but be mindful of the limitations with product formulations.”</p>.<p>Coca-Cola didn’t immediately return a message seeking comment.</p>.<p><strong>Drink Deals</strong><br />Constellation Brands, which is based in Victor, New York, started as a wine producer in 1945. It now sells Corona Extra and Modelo Especial in the US as well as Casa Noble tequila, Svedka vodka and High West whiskey.</p>.<p>A deal between Constellation and Monster could be interesting for the category of cannabis-infused beverages. Monster was said to be considering CBD or hard seltzer categories, but there are concerns that could tarnish the company’s image. </p>.<p>Constellation has a stake of almost 40% in Canopy Growth, a Canadian marijuana company. Canopy sells drinks with THC in Canada, and aims to sell them in the US if marijuana becomes federally legal.</p>.<p><strong>Also read — <a href="https://www.deccanherald.com/national/east-and-northeast/judima-wine-becomes-first-beverage-from-northeast-to-get-gi-tag-1034571.html" target="_blank">Judima wine becomes first beverage from Northeast to get GI tag</a></strong></p>.<p>Monster Beverage, earlier this month, reported record third-quarter net sales, despite supply-chain challenges, including securing aluminium cans amid the pandemic. </p>.<p>If the talks are successful, it would be the latest beverage deal since Coca-Cola agreed to acquire the remaining stake that it doesn’t own in sports-drink brand BodyArmor for $5.6 billion in cash earlier this month. </p>.<p>Other alcohol deals could be on the way. Private equity firm Sycamore Partners is also weighing a sale of Stag’s Leap Wine, potentially worth $1 billion, Bloomberg News previously reported. </p>.<p>Sycamore purchased the brand as part of its acquisition of Ste Michelle Wine Estates from Altria Group Incorporated in a $1.2 billion deal that closed in October.</p>.<p><strong>Watch the latest DH Videos here:</strong></p>