Energy Drink Maker Monster, Corona Beer Owner in Merger Talks

Monster Beverage and Corona brewer Constellation Brands are talking about combining companies, Bloomberg reported Monday (Feb. 14), citing sources familiar with the situation.

The merger agreement could go forward in the next few weeks if negotiations go well. The companies, which are similarly-sized, have a combined market value of $90 billion.

While merging with Constellation could offer more opportunities for growth for Monster, analysts have sometimes opined that it may not work out as well because they have different segments they operate in, per the report.

A deal would make for a unique combination of energy drinks, alcoholic beverages and possibly marijuana, as Constellation has around 40% stake in Canada-based cannabis company Canopy Growth, which sells THC-infused drinks.

That deal could have other ramifications going forward — critics say it’s up in the air what will happen in regards to Coca-Cola’s almost 20% stake in Monster. Others say producing THC drinks would hurt the images of Monster and Coca-Cola.

In January, Monster bought Canarchy Craft Brewery for $330 million, which added a half-dozen brands like Squatters, which makes Juicy IPA, to its roster. By merging with Constellation, Monster would be taking a much larger leap into the world of alcoholic beverages.

PYMNTS wrote in 2020 that PepsiCo, looking to get more into energy drinks, bought Rockstar Energy for $3.85 billion.

Read more: PepsiCo To Expand Energy Drink Share With Rockstar Acquisition

The report says Pepsi has had a distribution agreement in North America with Rockstar since 2009, and at the time, both Pepsi and Coca-Cola were exploring the energy drink market.

PepsiCo Chairman and CEO Ramon Laguarta said, per CNBC, “As we work to be more consumer-centric and capitalize on rising demand in the functional beverage space, this highly strategic acquisition will enable us to leverage PepsiCo’s capabilities to both accelerate Rockstar’s performance and unlock our ability to expand in the category with existing brands such as Mountain Dew.”