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Monster Beverage to Acquire American Fruits & Flavors


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Share price of Monster Beverage Corporation MNST has increased almost 3% since the energy drink company announced a definitive agreement to acquire its flavor supplier, American Fruits & Flavors (AFF), for $690 million on Feb 23. The acquisition is expected to be completed in the first quarter of 20Array6.

American Fruits & Flavors has been Monster Beverage's business partner for over 20 years supplying the flavors for the latter's energy drinks and other beverges. The acquisition will secure the intellectual property of the company's iconic flavors.

The acquisition will also aid in further development of flavors. Monster Beverage has consistently introduced new flavors of existing products while removing non-performing products. The company has several new product launches lined up for 20Array6. Introduction of new products ensure that the company continues to cater to the ever-changing demands of its customers. 

Acquisitions have become an important growth strategy for Monster Beverage. On Jun Array2, 20Array5, Monster Beverage closed a deal with The Coca-Cola Company KO . Monster Beverage acquired the ownership of Coca Cola's global energy drinks business, which includes brands like NOS, Full Throttle, Ultra and Burn.

On the other hand, Monster Beverage transferred its non-energy business to TCCC, which includes Hansen natural sodas and juice products, Peace Tea and Hubert Lemonade. The deal provided Monster Beverage full access to Coca-Cola's world-class global distribution network. The deal should also significantly expand Monster's presence in the international energy drinks market where it currently has a limited presence. The deal made Monster Beverage a stronger energy drink company.  

Monster Beverage carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the beverage industry include Primo Water Corporation PRMW and Coca-Cola Enterprises, Inc. CCE . Both the companies hold a Zacks Rank #2 (Buy).

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COCA-COLA ENTRP (CCE): Free Stock Analysis Report

COCA COLA CO (KO): Free Stock Analysis Report

PRIMO WATER CP (PRMW): Free Stock Analysis Report

MONSTER BEVERAG (MNST): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Business , Investing , Stocks
Referenced Symbols: KO , PRMW , MNST




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