Coca-Cola-Monster Beverage

Monster and other energy drink makers have been at the centre of controversy in recent years (The Associated Press)

Coca-Cola is buying a 16.7 per cent stake in Monster Beverage for $2.15 billion, with the world's biggest soda maker hoping to benefit from the rapid growth of energy drinks in recent years.

The Atlanta-based company said Thursday it will also place two directors on Monster's board as part of the deal.

Analysts had suggested for some time that Coca-Cola might acquire Monster at a time when its flagship soda business has flagged in developed markets such as the United States. Monster Beverage Corp., meanwhile, has cultivated a loyal fan base by focusing its marketing on skateboarding, snowboarding and other sports events.

Monster and other energy drink makers have also been at the centre of controversy in recent years, however. The Food and Drug Administration has been investigating reports of deaths linked to energy drinks, but the agency noted that the reports don't prove the drinks caused the deaths.

Monster, based in Corona, California, has repeatedly said its drinks are safe and it does not know of any fatalities caused by its products.

As part of the deal, Coca-Cola and Monster will also swap some drinks to better align their respective portfolios. Monster will take Coca-Cola's energy drink business, which includes NOS, Full Throttle, Burn and Mother. In turn, Coca-Cola will take Monster's other beverages, such as Hansen's Natural Sodas and Peace Tea.

The transaction is expected to close later this year or in early 2015.

Shares of Coke rose 1.4 per cent to $40.75. Monster shares shot up 20 per cent to $85.77.