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Monster and Constellation could be a potent mixed drink

Monster has also signaled an interest in alcoholic beverages, but its executives have acted cautiously, being aware of the rapidly changing nature of the room. In the past few years as hard selters got hot, this category has gotten crowded and its popularity may have already peaked. Monster recently launched True North Pure Energy Seltzer, a non-alcoholic product that only adds to speculation about the company’s upcoming expansion into alcohol.

Coca-Cola, as the # 1 shareholder in Monster, adds another layer of complexity to any deal. Its bottlers are some of Monster’s key customers and global distributors. The beverage trio could team up using Constellation’s U.S. alcohol distribution network and Coke’s international power, but this arrangement could be too complex. Antitrust authorities may also not like such a company’s ability to crush upstarts.

When companies put out feelers on a deal, Monday’s stock prices aren’t reassuring – they’re almost never for mega-mergers that tend to overpay and underdelivery. Still, it’s easy to see that energy drinks, ready-to-drink alcohols, and pot make a convincing mix. At the very least, the idea will spark other beverage giants looking for new ways to convince consumers to keep reaching for their bottles and cans.

Tara Laughing Chapel is a columnist for Bloomberg Opinion covering the entertainment and telecommunications business, as well as wider business. She previously wrote an M&A column for Bloomberg News.

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