The Coca-Cola Co. on Monday denied being in talks to buy the Monster Beverage Corp., after rumors of negotiations between the two had pushed the energy drink maker's shares up earlier in the day.
"At this time, we are not in discussions to acquire the Monster Beverage Corporation," Coca-Cola said in a statement. The soft-drink giant says it has an existing distribution relationship with Monster in several markets and frequently holds discussions with its partner. A spokeswoman for Monster declined to comment.
Shares in Monster jumped as much as 26 percent earlier Monday, after the Wall Street Journal reported that Coca-Cola was in talks to buy the company. Monster's shares began falling after doubts spread about a potential transaction. They ended the day down 53 cents at $65 a share.
If completed, the purchase would have been one of the biggest deals in Coca-Cola's history, surpassing the beverage maker's $12 billion acquisition of its North American bottling operations. The company's biggest brand takeover to date was its $4.2 billion purchase of Energy Brands, the maker of Vitaminwater drinks.
But analysts and investors expressed concern that the price of a Monster takeover would have been too large. Monster's market value as of last week was about $11.2 billion. Factoring in a decent premium meant that the deal could have cost well over $13 billion.
Another hurdle to any deal is the existing distribution agreement, in which Coca-Cola sells some of Monster's products. That pact eliminates some of the cost savings Coca-Cola would use to justify a deal.