Coca-Cola (NYSE:KO) announced Monday it has bought full control of sports drink maker Bodyarmor for $5.6 billion, making it the company’s largest brand acquisition to date.
The beverage giant bought a 15% stake in Bodyarmor in 2018, becoming its second-largest shareholder. At the time, basketball legend Kobe Bryant was its third-largest shareholder after investing in Bodyarmor in 2013, just two years after its founding. Bryant’s estate will receive more than $400 million from the sale, according to the Wall Street Journal.
The deal for the remaining 85% of Bodyarmor isn’t entirely unexpected. Coke first said in February that it intended to buy a controlling interest in Bodyarmor later this year in a pre-acquisition filing with the Federal Trade Commission.
Owning Bodyarmor helps Coke gain market share in the sports drink category, although PepsiCo’s Gatorade is far and away the market leader with roughly 70% market share. By positioning itself as a healthier sports drink, Bodyarmor has surpassed Coke’s Powerade to become the second-largest player in the category. According to Coke, the sports drink brand’s retail sales are more than $1.4 billion, up about 50% this year.
As part of the deal, Bodyarmor co-founder Mike Repole will collaborate on the company’s still beverages portfolio. Repole also founded Vitaminwater, Smartwater and Energy Brands, all of which are now owned by Coke. Repole and BodyArmor President Brent Hastie will also stick around to help Bodyarmor in its quest to overtake Gatorade.
KO shares faded seven cents to $56.30.
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