Coca-Cola Makes Largest Acquisition Yet With $5.6 Billion Purchase Of Bodyarmor

Coca-Cola announced its biggest acquisition in company history on Monday with a $5.6 billion purchase of sports drink maker Bodyarmor.

Coke first became involved with Bodyarmor in 2018 when it purchased a 15% stake in the company, becoming the second largest shareholder ahead of the late NBA star Kobe Bryant.

According to the Wall Street Journal, the Bryant estate will receive over $400 million from the deal. In the announcement of the deal, Coke praised Bryant’s "vision and belief" for contributing to the success of the Bodyarmor brand and vowed to move it forward under the company's umbrella.

By purchasing Bodyarmor, Coke expanded its market presence significantly in the sports drink market. It already manufactured Powerade for decades, but the emergence of Bodyarmor in 2011 gave it steep competition and eventually eclipsed it by becoming the No. 2 sports drink. According to Coke, Bodyarmor's retail sales are more than $1.4 billion anuually, up about 50% this year.

To fund the deal, Coke says it will rely on cash on hand and its acquisition is "consistent with an M&A and capital allocation framework that focuses on accelerating growth, expanding capabilities and driving efficiencies."

The last year was a difficult one in some ways for Coca-Cola, which like many companies struggled against the COVID-19 pandemic. Last October, Coke announced it would be undergoing a shake-up in its product line to revive its slumping sales amid a cascade of pandemic-related problems, particularly restaurant closures worldwide.