Valuation and transaction analysis

: Coca-Cola and Monster Beverage

Abstract

This dissertation evaluates the hypothetical acquisition of Monster Beverage by The Coca-Cola Company. It uses DCF analysis, comparable company analysis, and precedent transactions to establish an acquisition price of $68.55 per share, which includes a 22.63% premium. Net synergies after integration costs are $16,404 million, with a premium as percentage of synergies equal to 59%, benefiting both firms’ shareholders. The financing comprises 50% cash $26.35 billion and 50% equity, with cash funded by 70% new debt and 30% reserves. Through the transaction, Coca-Cola strengthens its energy drink market presence, while Monster leverages Coca-Cola’s global distribution for growth. Synergies arise from procurement, manufacturing, distribution, and marketing efficiencies. The merged entity can better meet consumer trends and compete with Pepsi and Red Bull. While there are regulatory and integration risks, the deal offers financial and strategic value, enhancing long-term shareholder returns in a highly competitive beverage sector.

Date of Award	10 Jul 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	António Borges de Assunção (Supervisor)