Monster Beverage Corp (NASDAQ: MNST) shares haven't lost their fizz despite a decision Monday that opens the door to more competition for the brand.
The Coca-Cola Co (NYSE: KO) and Monster announced Monday that an arbitration tribunal of the American Arbitration Association deemed that Coca-Cola can sell its own energy drink, Coca-Cola Energy, without violating a contract it has with Monster.
Both companies consummated a strategic partnership agreement in 2015 that saw Coca-Cola take a 16.7% stake in Monster and transferred ownership of its worldwide energy business to Monster, while Monster transferred ownership of its non-energy business to Coca-Cola.
When Coca-Cola opted to sell its own energy drink, both companies submitted their dispute to the arbitration panel in October.
The panel ruled that Coca-Cola Energy products now fall within "an exception to a non-compete provision" relating to beverages marketed or positioned under the Coca-Cola brand.
The ruling gives Coca-Cola rights to continue to sell and distribute Coca-Cola Energy in new markets globally as well as in markets where it has been launched.
"While there was a disagreement between Coca-Cola and Monster over contractual language, the companies value their relationship and look forward to their continued partnership," the companies said in Monday's press release.
Coca-Cola shares were up 0.77% at $51.30 at the time of publication Monday, while Monster shares were higher by 0.14% at $63.92.
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