Drinks

Coca-Cola Is Said to Have Option to Acquire Suja as Part of Deal

By Publications Checkout
Coca-Cola Is Said to Have Option to Acquire Suja as Part of Deal

Coca-Cola, which announced an investment in organic-juice maker Suja Life on Wednesday, has the option to acquire the company outright within about three years, according to two people familiar with deal.

For now, Coca-Cola and Goldman Sachs’s merchant- banking division are investing $150 million in Suja, purchasing just under 50 per cent of the company, said the people, who asked not to be identified because the terms are private. That would value the juice startup at about $300 million. As part of the transaction, Coca-Cola will expand Suja’s distribution and provide funds to build a new factory.

The move follows Coca-Cola’s pattern of investing in companies with more growth potential, helping offset a sluggish soda business. For Suja, though, the deal has been controversial. The San Diego-based company eschews genetically modified organisms, or GMOs, and donates a portion of its sales to environmental causes. Since reports of the Coca-Cola partnership first surfaced last week, Suja has seen a backlash from customers concerned that the company is losing its way, said Chief Executive Officer Jeff Church.

“Some of those fans have said that they won’t purchase our products in the future if we partner with the Coca-Cola Co.,” Church said in a blog post on Suja’s website. “For those fans considering leaving Suja, I would ask you reconsider, and to hold us accountable on our promises to you: If you notice any changes in the quality of our product, our transparency as company or our commitment to the organic and non-GMO movement, let us know! And we will make it right.”

News by Bloomberg, edited by ESM

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