USA – Monster Beverage has been cleared to acquire former rival Bang Energy out of Chapter 11 for US$362 million and settle litigation between the energy drink companies.
Monster Beverages and Vital Pharmaceuticals (VPX Sports), owner of Bang Energy, entered into an asset purchase agreement on 3 July 2023 under which a Monster subsidiary would acquire all of Bang Energy’s assets.
The acquisition includes Bang’s performance beverages and related businesses and a beverage production facility located in Phoenix, Arizona, US.
As of June 30, it was unclear if the Federal Trade Commission would finish its review of information about the deal by the deadline.
VPX Sports, which filed for bankruptcy in October after a California court awarded Monster Beverage US$293 million against Bang and its former CEO Jack Owoc, said its lenders support the sale to Monster Beverage Group and consider it the only way to repay its creditors.
The company added: “As we move forward with this transaction, we are required to comply with the federal WARN (Worker Adjustment and Retraining Notification) Act to inform a group of our employees that they may be impacted by a future workforce reduction. We are communicating with our teams openly and transparently.”
Judge Peter Russin, in his ruling, said he’d approve the settlement and sale — averting the shutdown of Bang Energy, which has faced an uncertain future after its board fired founder and former Chief Executive Officer Jack Owoc earlier this year.
Judge Russin said possible layoffs are unfortunate but that the sale will preserve at least 300 jobs and was the best option for Bang even if a sale of the energy drink maker to Monster “is a disaster” from Owoc’s point-of-view.
He also approved a resolution to false advertising litigation against the maker of Bang Energy. Additionally, Judge Russin denied Owoc’s request to challenge the direction of Vital’s Chapter 11 and attempted to remove from the bankruptcy case a Bang affiliate that owns a valuable Phoenix bottling facility.
Monster Executive Vice President and Deputy General Counsel Paul Dechary said in a sworn statement the company has substantial resources to satisfy financial obligations under the Bang deal.
Monster has a market capitalization of about US$59 billion and cash and cash equivalents of about US$3 billion, Dechary said.
In its recent earnings report for the quarter ending May 4th, Monster generated US$1.70 billion in revenue, slightly surpassing analyst estimates of US$1.69 billion, an impressive 11.9% increase compared to the same period last year.
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