Beverage giant Coca Cola announced that it will be taking over Body Armor. The acquisition is a $5.6 billion cash deal and is the largest ever acquisition by Coke The sports-drink brand that is popular with athletes has a value of $6.59 billion but is far behind in popularity when compared with Gatorade, the market leader with an approximate 70 percent market share. Gatorade is also one of the most popular brands of PepsiCo.
On Monday, Coke announced the deal. It confirmed the report of the deal by the Wall Street Journal on Sunday as well reports by other outlets. This deal was in the making as Coke had already indicated its interest in gaining full control in Body Armor. Earlier it had bought a 15 percent stake in 2018 and was the second largest stock holder.
Kobe Bryant was the third largest shareholder. The legendary basket ball player had picked up a stake in BodyArmor in 2013. Currently his estate will gain more than $400 million after the acquisition according to a report from the WSJ.
BodyArmor is popular with sportspersons although its far behind Pepsi’s Gatorade. It positions itself as a healthier sports drink. It overtook Coca Cola’s Powerade and is the second largest player in the sports drink market. Coca Cola said that BodyArmor’s sales are expected to be more than $1.4 billion. This indicates that its retail sales have risen by roughly 50 percent in 2021.
Coca Cola said that the sport drink maker will be an independent unit within its North American operations. Co-founder Mike Repour will also be a part of the still beverage portfolio of Coke. President Brent Hastie is also expected to remain with BodyArmor as they strive to overtake market leader Gatorade.
Analysts say that the acquisition of Body Armor by the beverage giant Coca Cola is a positive step as it has shed its low selling drinks including Coca-Cola Plus energy drink while expanding its range of beverages under Chairman and CEO of Coca Cola James Quincey.