Coca-Cola's $5.6 billion acquisition of BodyArmor is the largest brand acquisition in the company's history

Financial Associated Press (Shanghai, editor Xia Junxiong) news, local time on Monday (November 1), beverage giant Coca-Cola Company announced that it has spent $5.6 billion to acquire a full controlling stake in sports drink brand BodyArmor, the largest acquisition in the company's history.

It's no surprise that Coca-Cola's wholly-owned acquisition of BodyArmor, which acquired a portion of BodyArmor in 2018, became its second-largest shareholder. In February, Coca-Cola said in a filing with the U.S. Federal Trade Commission (FTC) that it was calculating to acquire the remaining stake in BodyArmor later this year.

BodyArmor's products include sports drinks, alkaline waters, and caffeinated sports drinks. Owning the company helps boost Coca-Cola's competitiveness in the sports drink market, BodyArmor is on a rapid rise, surpassing Coca-Cola's Powerade and second only to Gatorade in market share.

Goldman Sachs analyst Bonnie Herzog said data from market research firm Nielsen showed that U.S. retail stores had $8.4 billion in beverage sales over the past year, with Gatorade accounting for the vast majority of the market, with Gatorade accounting for 64 percent of sales in the four weeks to Oct. 9, BodyArmor in second place with an 18 percent market share, and Coca-Cola's Powerade sales at just 13 percent.

Credit Suisse analyst Kaumil Gajrawala believes that the acquisition is good for Coca-Cola, on the one hand, because of BodyArmor's brand equity, on the other hand, Coca-Cola can distribute its sports drinks globally like the acquisition of Monster.

The acquisition of BodyArmor is the largest brand acquisition in Coca-Cola's history, surpassing the $5.1 billion acquisition of coffee chain Costa in 2018.

In recent years, Coca-Cola CEO James Quincey has worked to build the company into a full-service beverage brand, and in addition to its foray into the coffee and sports drink markets, Coca-Cola has also made moves in the alcoholic beverage market, and the company recently launched an alcoholic version of Topo Chico soda.