Dive Brief:
- Monster Energy is set to buy rival Bang Energy for up to $362 million, according to a court filing dated June 28. Blast Asset Acquisition, a Monster subsidiary, was the only successful bidder for substantially all of Bang’s assets. Monster had no comment on the filing.
- The document, filed in the U.S. Bankruptcy Court for the Southern District of Florida, also showed that a previously scheduled auction for Bang has been canceled. The purchase by Monster still needs regulatory approval.
- Bang has been struggling for years amid increased competition in the fast-growing energy drink space and legal disputes that ultimately contributed to its bankruptcy filing last year.
Dive Insight:
Monster’s decision to acquire Bang is the culmination of a long, drawn-out saga for the beleaguered energy drink maker.
In the last few years, Bang and its parent Vital Pharmaceuticals, has been mired in a legal tussle and bitter breakup with snack and beverage giant PepsiCo, seen the ouster of its controversial and outspoken founder and CEO Jack Owoc and filed for bankruptcy.
The bankruptcy filing in October came after Monster Energy won $293 million in a false advertising and trade secrets case against Bang. Monster was identified in bankruptcy court papers as Bang’s largest unsecured creditor.
In April, Stifel analyst Mark Astrachan said Monster was “best-positioned to acquire” Bang, noting that in addition to being its largest creditor, it is a co-rights holder to a 5% perpetual royalty/license for use of the Bang beverage trademark. At the same time, he said Monster was challenging Bang’s ability to transfer the Bang trademark license to an acquirer, which would give Monster “near total control over Bang’s future.”
Little is known about what Monster would do with Bang should it assume control of it as expected. It could decide to shut down the brand, effectively removing a competitor from the marketplace. Most likely, however, it will choose to add a smaller energy drink brand with a widely recognizable name to complement its dominant Monster offering.
In his research note, Astrachan said Bang’s market share was 2.6% of the U.S. energy drink category compared to Monster’s 35.1% share. Monster, which has entered alcohol and water, posted $6.31 billion in sales in 2022. The beverage company’s net sales have increased annually since 2008 when sales totaled $1 billion, according to Statista.
As part of the acquisition, Monster also would likely take control of a Bang-operated 400,000-square-foot manufacturing facility near Phoenix that could produce about 15% of Monster’s U.S. volumes and help it supply a larger portion of the company’s West Coast production needs.
