The Coca-Cola Company is in the closing stages of completing its acquisition of sports drink brand BodyArmor at a valuation of around $8 billion, according to media reports.
Citing sources close to the deal, Bloomberg News reported on Thursday that an agreement could be announced in the next few weeks.
The transaction has been in the works since February when Coca-Cola notified U.S. antitrust regulators that it had begun the process of acquiring a controlling stake in BodyArmor, a deal that would position the brand to potentially realize its long-held goal of dethroning category leader Gatorade, a division of PepsiCo, to become the “#1 brand in active hydration.” Coca-Cola became BodyArmor’s second-largest shareholder, after chairman and co-founder Mike Repole, in 2018.
According to Nielsen data through October 9, BodyArmor has a 16.5% dollar share of the sports drink category — the second-largest behind PepsiCo (66.3%). Sales of BodyArmor increased 61% in the two-week period ended on October 9, growing 46.9% year-over-year to around $1.3 billion. During that same time, dollar sales for Coca-Cola’s existing sport drink brand, Powerade, were up 2.4% to around $1.1 billion.
Coke’s interest in BodyArmor comes as the soda giant has pivoted its growth strategy in recent years away from investment in mid-level and emerging brands and towards established big ticket acquisitions, such as Topo Chico or its $5.1 billion purchase of Costa Coffee. At the same time, the company has divested in a number of brands — Zico, Health-Ade, Odwalla and Suja, most notably — once seen as potential permanent additions to its portfolio, while also looking inward for innovation via brands like Minute Maid, Fairlife and its flagship soda line.