Investing.com – Coca-Cola stock (NYSE:KO) traded up 0.1% in Monday’s premarket while a report in The Wall Street Journal said the company is taking full control of sport drink-maker BodyArmor.
According to the WSJ report, Coke is likely to pay $5.6 billion for the 70% stake it doesn’t own in the company. The sellers include the company’s founders and investors including some well-known names like NBA’s James Harden and MLB’s Mike Trout who helped popularize the drink.
The acquisition is Coke’s attempt to widen its portfolio of non-aerated and low-calorie drinks as consumers look for healthier alternatives. It's also a fresh attempt to crack the stranglehold of its rival Pepsico (NASDAQ:PEP) on the sports drink market. Pepsico's Gatorade accounts for nearly two-thirds of the U.S. market, the WSJ said, while Coke's own Powerade sports drinks have a market share of less than 15%.
BodyArmor’s products include sports drinks, alkaline water and caffeinated sports drinks. It expects to generate about $1.4 billion in retail sales this year, the report said quoting people familiar with the matter. Sales were about $250 million in 2018 when Coke first invested in the startup.
PepsiCo stock also edged 0.2% higher.