Directors of the Coca-Cola Co on Thursday night approved the purchase of Glaceau, the maker of Vitaminwater, for US$4.2 billion in cash and Coke stock, according to a person involved in the negotiations.
The deal was scheduled to be announced yesterday, the person involved said. Coke executives declined to comment on Thursday night.
The acquisition has been expected for weeks, as Coke pursued Glaceau, which is also known as Energy Brands, to upgrade its portfolio of noncarbonated beverages, the sales of which have been growing much faster than those of soda in the US in recent years.
While the price tag is substantial for a company with earnings last year of about US$350 million, analysts said the cost of not doing the deal, given Coke's relatively weak position in noncarbonated beverages, could also have been high.
The deal may also exorcise some ghosts in Coke's past.
For the last decade or so, Coke, which has a 43 percent share of the soda market in the US, compared with 31 percent for the rival PepsiCo, has lagged in introducing noncarbonated beverages.
Coke was late in introducing bottled water to the market. And in 2000, Coke's chief executive signed a deal to buy Quaker Oats, which included Gatorade, but the board turned him down.
Quaker was then swept up by PepsiCo.
This year, PepsiCo's share of the noncarbonated beverage industry in the US -- which includes bottled water, sports drinks and juice -- was 50 percent. Coke's market share was 23 percent, according to the trade publication Beverage Digest, which first reported the negotiations last month.
William Pecoriello, an analyst with Morgan Stanley, called the acquisition, a "potential game changer" in the market for noncarbonated drinks.
"It would fill a major gap in its noncarb portfolio," Pecoriello said last week in a note to investors.
Glaceau also makes Fruitwater, an energy drink called Vitaminenergy and Smartwater, which contains electrolytes. Pecoriello said the sale of Glaceau's products could be expanded overseas.
Glaceau's Web site says: "Welcome to the Center for Responsible Hydration."
The company was founded in 1996 by J. Darius Bikoff, who remains chief executive. He could not be located for comment.
Glaceau is based in Whitestone, Queens, in New York City.
The company sold 77 million 192-ounce cases last year, a standard industry measure, Beverage Digest said.
That was a 103 percent increase over the previous year.
By contrast, Coca-Cola sold 5.5 billion cases in the US alone.
Japan has deployed long-range missiles in a southwestern region near China, the Japanese defense minister said yesterday, at a time when ties with Beijing are at their lowest in recent years. The missiles were installed in Kumamoto in the southern region of Kyushu, as Japan is attempting to shore up its military capacity as China steps up naval activity in the East China Sea. “Standoff defense capabilities enable us to counter the threat of enemy forces attempting to invade our country ... while ensuring the safety of our personnel,” Japanese Minister of Defense Shinjiro Koizumi said. “This is an extremely important initiative for
Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) today accepted an invitation from Chinese President Xi Jinping (習近平) to lead a delegation to China next month, saying she hopes to promote the peaceful development of cross-strait relations and bring stability to the Taiwan Strait. “I am grateful and happy to accept this invitation,” Cheng said in a statement from the KMT chairperson’s office. Cheng said she hopes both sides can work together to promote the peaceful development of cross-strait relations, enhance exchange and cooperation, bring stability to the Taiwan Strait and improve people’s livelihoods. At today's news conference, Cheng said any efforts to
MORE POPULAR: Taiwan Pass sales increased by 59 percent during the first quarter compared with the same period last year, the Tourism Administration said The Tourism Administration yesterday said that it has streamlined the Taiwan Pass, with two versions available for purchase beginning today. The tourism agency has made the pass available to international tourists since 2024, allowing them to access the high-speed rail, Taiwan Railway Corp services, four MRT systems and four Taiwan Tourist Shuttles. Previously, five types of Taiwan Pass were available, but some tourists have said that the offerings were too complicated. The agency said only two types of Taiwan Pass would be available, starting from a three-day pass with the high-speed rail and a three-day pass with Taiwan Railway Corp. The former costs NT$2,800
The nation’s fastest supercomputer, Nano 4 (晶創26), is scheduled to be launched in the third quarter, and would be used to train large language models in finance and national defense sectors, the National Center for High-Performance Computing (NCHC) said. The supercomputer, which would operate at about 86.05 petaflops, is being tested at a new cloud computing center in the Southern Taiwan Science Park in Tainan. The exterior of the server cabinet features chip circuitry patterns overlaid with a map of Taiwan, highlighting the nation’s central position in the semiconductor industry. The center also houses Taiwania 2, Taiwania 3, Forerunner 1 and
RSS