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Coca-Cola Co. yesterday said it would acquire U.S. beverage company Odwalla Inc. for $181 million in a deal that strengthens its presence in the fast-growing non-carbonated premium drink market.
Coca-Cola, the world's number-one soft drink company, will offer $15.25 a share for Half Moon Bay, Calif.-based Odwalla, whose products include the Odwalla and Samantha lines of fresh fruit and vegetable juices, dairy-free shakes, smoothies and spring water.
Analysts said Coke's proposed acquisition was fueled by the company's growing focus on niche beverages. Odwalla products are sold in about 5,000 convenience stores and supermarkets across the nation.
An acquisition of Odwalla would add to a string of recent deals put together by the soft-drink giant. In the past year, the soft drink giant has acquired Planet Java, a maker of coffee drinks, and Mad River Traders Inc., which distributes New Age teas, juices, lemonades and sodas. Some analysts believe that Coca-Cola's acquisitions are a response to a flurry of deals that appear to have given its Purchase, N.Y.-based archrival Pepsico Inc. a leg up in the market.
Last year, Pepsi paid an estimated $370 million to scoop up a majority stake in South Beach Beverage Co. (SoBe) and control over the popular SoBe line of herb-spiked fruit, energy and tea drinks. Pepsi also acquired the prized Gatorade sports drink through a recently completed $13 billion acquisition of Quaker Oats Co.
Coca-Cola, which noted that 57 percent of Odwalla's shareholders already had committed themselves to its tender offer, said the company would become a separate business unit of its Minute Maid Co. juice division. Odwalla's current management team, including CEO Stephen Williamson, will remain in place.
"The innovation and expertise of the Odwalla team coupled with our innovation and logistics network are key to expanding the brands they have created and nurtured," said Don Short, president and CEO of Minute Maid.