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Skadden’s McGarry guides Coke on $2.2 billion Monster partnership

When The Coca-Cola Co. decided to form a $2.15 billion strategic partnership with Monster Beverage Corp., it turned to Skadden partner Martha E. McGarry to represent it

Martha E. McGarry

It’s a monster deal by any definition. And when The Coca-Cola Co. decided to form a $2.15 billion strategic partnership with Monster Beverage Corp., it turned to Skadden partner Martha E. McGarry to represent it.

“What made this deal interesting was the way Coca-Cola wanted to structure it,” McGarry, who has represented Coca-Cola for more than a decade, told WIPL in an interview. “The company wanted to get into a completely new area with a product that they saw as diversifying and innovative, but in a way that was a strategic investment not a whole-company investment. Monster has a very edgy reputation, which is part of its appeal. But Coca-Cola also has one of the most iconic brands in the world to protect.”

Under the terms of the deal, Coca-Cola will acquire a 16.7 percent stake in Monster; Coca-Cola will transfer its worldwide energy drink business to Monster and in exchange, Monster will issue Coca-Cola shares of its common stock and transfer its non-energy beverage business to Coca-Cola; and Coca-Cola will become Monster’s preferred distribution partner globally.

These three separate components of the deal required weeks of negotiation, according to McGarry. ”The three different components of the transaction required relatively voluminous documentation, as compared to a straight acquisition.” she said. Timing and confidentiality were also major considerations, she said. “This was a high-profile matter, and we were trying to go quickly to avoid the risk of leaks.”

McGarry, based in the New York office, also worked on Coca-Cola’s recent 10 percent investment and strategic partnership with Green Mountain Coffee Roasters, Inc. regarding its Keurig Cold at-home beverage system.

The deal is an example of the variety of work that first drew her to M&A, she said. “There is nothing routine about the issues in transactional work, which makes it interesting. There are other areas of practice where you can be an excellent craftsman, but the documentation is more routinized.” McGarry also enjoys the strategic aspects of M&A. “It’s also interesting to deal at a very senior level with management and the board. Not only are you constantly looking at their industry but also at relevant macroeconomic trends. In this area of law, you are exposed to cutting-edge perspectives about how industries are shaped and how smart management teams and boards of directors are reacting to these trends,” she said.

McGarry focuses her practice on corporate and securities law with extensive experience in both U.S. and cross-border mergers and acquisitions, joint ventures and other strategic collaborations, corporate governance and shareholder activism preparedness. McGarry was the founding chair of the firm’s global Client Development Committee and has served on Skadden’s governing body, The Policy Committee.

Contributing Author

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Amy I. Stickel

Amy I. Stickel has extensive experience covering the legal, financial and pharmaceutical industries as a writer and editor. A past managing editor of Corporate Legal Times and...

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