Monster Beverage Corp acquisition deal for Bang Energy drinks maker becomes uncertain

US – The deal for the acquisition of the maker of Bang Energy drinks, Vital Pharmaceuticals, by the American energy drinks giant Monster Beverage Corp for US$362 million, could fall apart according to a court filing in U.S. District Bankruptcy Court.

According to a leaked court document, Blast Asset Acquisition–an acquisition vehicle that is a subsidiary of Monster Beverage Corp–was the only successful bidder for VPX’s assets, which had been due to go up for auction on 30 June.

However, due to a pending investigation by the U.S. Federal Trade Commission, the sale may be derailed.

The document, which was filed with the US Bankruptcy Court for the Southern District of Florida, showed the two parties had entered an “asset purchase agreement” valuing “all or substantially all” of the assets at $362m. This figure includes a $25m deposit and an assumption of assumed liabilities.

Bang lawyer Andrew Sorkin said during a court hearing that the company will have to liquidate if it’s unable to move forward with the sale by the time the bankruptcy case matures Friday, Bloomberg reported, but the FTC and Justice Department are still reviewing the merger.

The U.S. antitrust agencies have said they will require companies to turn over much more information about their transactions than before as they try to crack down on illegal mergers, adding months of review to proposed deals.

Vital Pharmaceuticals Inc., which makes Bang Energy, said its lenders support the sale to Monster Beverage Group and consider it the only way to repay its creditors.

If the deal fails to gain approval by the end of the week, the company could be forced to liquidate, a move that could result in the loss of about 700 jobs, according to Bang.

Vital Pharmaceuticals filed for bankruptcy in October after a California court awarded Monster Beverage $293 million against Bang and its former CEO Jack Owoc.

Monster said Bang doesn’t include any actual creatine and saying it did was not only misleading but could cause Monster to lose customers.

Monster won the case but said Bang continued using “Super Creatine” in its marketing and went after Bang again in April, asking a judge to issue a court order forcing the company to stop.

The Vital Pharmaceuticals brand temporarily agreed to remove any mention of “Super Creatine” in November. “Fuel your destiny” was the replacement message on the Bang Energy cans.

The actual struggles date back to the company’s split from distributor PepsiCo in acrimonious circumstances in 2020. The company’s outspoken CEO Jack Owoc later accused the Gatorade brand owner of “engaging in a premeditated plan to destroy” the energy drink.

Owoc said the reason for Bang Energy’s poor performance whilst distributed by PepsiCo was that the CSD giant was not committed to the brand.

He believed the Rockstar brand owner’s reluctance to take a stake in the business was because it ultimately wished to destroy Bang Energy.

For all the latest food industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.