Inside a Monster Deal

CokeMonsterBevNET’s dogged reporting has unearthed the document chain that seems to reveal the machinations that led to the recent sale of 17 percent of Monster Energy to the Coca-Cola Co. for $2.15 billion and the swap of the Hansen’s portfolio in exchange for Coke’s suite of energy drinks.

To: Mukhtar Kent, CEO, Coca-Cola Co., Inc.
From: Sandy Douglas, President Coca-Cola North America
RE: Strategic Objectives

Mukhtar, I can’t help but think we’re in a tight spot. We bought the bottlers back, we printed all those names on the Diet Coke bottles, we even bought that hippie’s tea company. But the projections aren’t great. Our core products are in decline, Wall Street’s turning on us — and did you SEE what Bloomberg did to Santa Claus? It’s time to shake things up a bit.

Love to the family,
Sandy

 

To: Sandy Douglas
From: Mukhtar Kent
Re: Strategy Objectives

Sandy, I hear you. Do you know that Jim Cramer gave me the razzberry on-air? I’m also worried Indra’s going to get my spot at Davos. But are you on The Facebook? There’s this thing called the ice bucket challenge, where if you’re on the winning side in a golf match, they dump a bunch of Gatorade on your head while you give your money away. What if we started doing that but with, say, a proprietary package? Like a super-size bucket of Coke – but we could monetize it differently?

We could spin the bottlers back out, sell them the buckets, and then charge them for the icewater. It’s the old razor and cartridge approach! Let me know your thoughts.

Regards,
Mukhtar

 

To: Mukhtar Kent
From: Sandy Douglas
Re: Buckets

Mukhtar! Despite your fundamental misunderstanding of American Football, you’re a genius. Let’s buy Gatorade!

 

To: Mukhtar Kent
From: Sandy Douglas
RE: Buying Gatorade

So, I did some research. Turns out we, uh, passed on that deal.

 

To: Sandy Douglas
From: Mukhtar Kent
Re: Buying Gatorade

Don’t worry. I have a Plan B. As in, Plan KoBe.

 

ITALIC LONGHAND TRANSLATED FROM THE TURKISH:

Dear Chairman Kent,

Thanks so much for your generous offer of a trip on the Coke airplane and most of Northwest Atlanta in exchange for my shares of Body Armor. You know, I’ve won five championships and a million MVP awards, but there’s no way I’m selling. Here’s the thing: no amount of basketball, no cars, not even four “mythic rare” Magic the Gathering cards can compare to the daily affirmation I receive from being the third-largest shareholder in a small sports drink company.

Best,
KOBE

 

AOL INSTANT MESSENGER

To: MREPOLESTJOHNSJOCKEY
From: LCOLLSESQUIREDONTYOUFORGETIT
Hey, Mike, sorry about naming you in that Ice Bucket Challenge. Did you get that note from Kobe about that offer Sandy and Mukhtar made?

To: LCOLLSESQUIREDONTYOUFORGETIT
From: MREPOLESTJOHNSJOCKEY
I did. I think a billion is undervaluing the company. Sure, we’re small, but we’re nimbler. For example, we’re using Instant Message! And you know me. You can’t outwork me. I haven’t slept in 16 days straight.

To: MREPOLESTJOHNSJOCKEY
From: LCOLLSESQUIREDONTYOUFORGETIT
I think I’ll tweet something. Nimble!

 

TRANSCRIPT: PHONE CALL

SD: Mr. Ferolito? Hi there. It’s Sandy Douglas.
JF:  Sandy! What’s going on?
SD: Not much, John. How’s Florida?
JF: Well, it was great until Don stopped sending the checks.  These days, I spend my time wandering the beach with a metal detector. Of course, it’s my beach, and every night, nineteen servants run out and bury gold ingots, but still, at my age, it’s tough to stoop – and it’s getting harder to find a good proxy stooper these days.
SD: Wanna make some money the easy way? Sell us the company!
JF: Well, I would, but Don and I are a little behind on the paperwork right now. Give him a ring?

 

TRANSCRIPT: MESSAGE ON SANDY DOUGLAS’ HOME ANSWERING MACHINE

Sandy, it’s Don. Got your message, but I can’t really discuss a deal, as John and I are suing the pants off each other. Have you thought about suing someone? It’s great fun, especially if you use a forklift to drop off your depositions in Manhattan. Have you thought about becoming a beer distributor?

 

To: Mukhtar Kent
From: Sandy Douglas
RE: Another Bright Idea

Mukhtar – Don is stuck on traffic on the LIE but he gave me a great idea. Why don’t we buy Budweiser? Think about it – we could rope two bleeding, longstanding brands together and take on the whole countryside. It’ll be like Lee Marvin and Ernest Borgnine in The Wild Bunch! I’m sure we’ve got a Gatling Gun hidden in the World of Coke basement.

 

To: Sandy Douglas
From: Mukhtar Kent
RE: Another Bright Idea

I do love Ernest Borgnine. But listen, Kobe gave me an idea. Why buy the cow when the milk is available to the third-largest shareholder?

 

To: Mukhtar Kent
From: Sandy Douglas
RE: Another Bright Idea

You mean a partial? Like with Keurig? I love those. It’s like we own ‘em, but we don’t own ‘em, and everyone acts all nice to us because if they don’t, we’ll fire ‘em when we finally do own ‘em. We should do it with Bloomberg, too. That’ll show them!

 

To: Sandy Douglas
From: Mukhtar Kent
RE: Another Bright Idea

Forget buying media. And licensed clothing. Stick to beverage. Who out there is overpriced?

 

To: Mukhtar Kent
From: Sandy Douglas
RE: Another Bright Idea

Why does it matter?

 

To: Sandy Douglas
From: Mukhtar Kent
RE: Another Bright Idea

Let’s use Monster Energy as an example. Let’s say we bought a sixth of it. Everyone on Wall Street would get into such a frenzy over our deal that they’d bid the price up a third. We’d have paid for the deal on day one! Actually… that’s a great idea. Get me Rodney and Hilton!

 

Attn: Monster Employees
From: Rodney Sachs, Hilton Schlosberg, Mark Hall
Re: Major Windfall

Well, we’re not going to lie to you, folks. We just hit it big… and there’s even more good news! We might’ve lost Hubert’s, Hansen’s, and Blue Sky, but we’ve still got PRE! Ready to discuss Mark’s newest idea, Monster Regular?