In May 2007, Coca-Cola Co. agreed to buy the maker of Glaceau Vitaminwater for $4.1 billion to narrow the gap with PepsiCo Inc. in the fast-growing market for flavored water.
Glaceau was an attractive acquisition for Coke because it successfully positioned itself in the enhanced water and energy drink categories, two categories that are credited with making up a significant portion of the beverage industry’s growth in North America.
Coca-cola Company will pay cash for closely held Energy Brands Inc., which controls about 30 percent of the U.S. market for waters spiked with vitamins and minerals. The purchase is the biggest in Coca-Cola's 115-year history.
Coca-Cola accounts for 5 percent of the U.S. market for water drinks, while PepsiCo has 45 percent with its SoBe, Aquafina and Propel brands.
The flavored water market grew 57 percent in 2005. Vitaminwater grew 200 percent.
This is the position Coke's in, having to pay up because there are so few assets out there that can move the needle for them.
Coca-cola bought Glaceau in May 2007 for $4.1 billion in cash.
Glaceau’s Vitaminwater, like Powerade, contains B vitamins – but has more sugar.
The 11-year-old company, based in the New York borough of Queens, had sales of $350 million last year, according to Morgan Stanley.
Coca-Cola, based in Atlanta, had $24.1 billion in sales in 2006. The company said Glaceau will add to earnings in the first year after the purchase is completed in mid-June2007.
Coca-cola, interested in making up for reduced sales of its carbonated beverages, also required Glaceau’s Fruitwater, Smartwater and vitaminenergy beverages.
Coca-Cola bought Glaceau
