Mergers & Acquisitions Investors Would Love to See: Monster (MNST) and Dr. Pepper Snapple (DPS)
Buyer: Monster Beverage Corporation (NASDAQ:MNST)
Seller: Dr. Pepper Snapple Group Inc. (NYSE:DPS)
Typically, in any M&A conversation, Monster Beverage is considered the seller, not the buyer.
However, the energy drink maker is financially sound, and its business is good; there’s no reason why it couldn’t pull the trigger on buying Dr. Pepper Snapple. The only question is whether Monster would want Dr. Pepper Snapple, whose margins are considerably lower.
A deal would also put an end to all the rumors that The Coca-Cola Co (NYSE:KO) — Coke owns 16.7% of Monster and is the company’s preferred global distribution partner — was eventually going to buy it.
Of course, Coke paid $2.2 billion to Monster in 2015 as part of its strategic partnership which included Coke transferring its energy drink assets to Monster while Monster moved its non-energy-drink assets to Coke.
I’m sure the two companies could figure out how to keep their partnership going despite Monster acquiring Dr. Pepper Snapple.