Coca-Cola plans to buy US energy drink Glaceau
Beverages giant Coca-Cola plans to acquire US energy drink firm Glaceau, in which Tata Tea has 30 per cent stake, in a deal that could be worth over $3 billion, US media reports said on Wednesday.
By PTI |
MUMBAI/NEW YORK: Beverages giant Coca-Cola plans to acquire US energy drink firm Glaceau, in which Tata Tea has 30 per cent stake, in a deal that could be worth over $3 billion, US media reports said on Wednesday.
Reports in The Wall Street Journal as well as two industry publications, Beverage Digest and Beverage Business Insights quoted unnamed sources as saying the world's largest soft drink maker is in serious negotiations to acquire part or all of Glaceau.
The reports sent shares of Tata Tea, which had bought the 30 per cent stake for $677 million in August last year, soaring by close to 15 per cent on the Indian bourses.
Tata Tea shares closed at Rs 773.35 on Bombay Stock Exchange, 14.8 per cent over the previous close of Rs 673.70. Earlier in the day, the stock hit an intra-day high of Rs 781.
When contacted, a Tata Tea spokesperson declined to comment. Officials at Atlanta, US-based Coca-Cola could not be immediately contacted.
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Based on the price of Tatas' acquisition, Whitestone, New York-based Glaceau could be valued at close to $2.25 billion. However, the reports suggested a deal could be worth as much as three billion dollars.Although it was not clear whether Coca-Cola was looking to acquire Tatas' stake or not, brokers said the sharp rally in Tata Tea's shares today was triggered by expectations that the company could reap huge premium on its stake in Glaceau if the US giant decides to acquire 100 per cent of the North American energy drink maker.
The reports said that Coke was looking to expand its non-soda based products portfolio with this acquisition in its bid to reverse its declining sales momentum.
In February this year, Coke had acquired Fuze Beverage, a maker of energy, tea and vitamin drinks, and is also reported to have been in talks to acquire Arizona Teas.
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The reports said a deal was imminent for Glaceau's acquisition by Coca-Cola, although the soft drink giant might chose to announce the transaction at or just before its North American bottlers' meeting in Atlanta next month.Glaceau manufactures products like Vitaminwater, Smartwater among other energy drinks.
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Meanwhile, Coca-Cola's Chief Financial Officer Gary Fayard declined to comment on these reports in an interview to CNBC television channel.Start a SIP with as low as ₹500 with ET Money App!
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