Monster Beverage Deal Talks Follow Two-Decade 107,060% Rally

(Bloomberg) — Monster Beverage Corp. carries a unique distinction as it negotiates a potential tie up with Constellation Brands Inc. — the title of the S&P 500’s top stock over the past two decades.

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The maker of energy drinks has risen 107,060% over the last 20 years to Friday’s close, with most of the gains coming in the first decade of the century. In the last 10 years, Constellation’s returns have been more than double those of Monster, which counts Coca-Cola Co. as a major shareholder. Monster has a market value of about $48 billion, and Constellation Brands, which makes Corona, is worth about $44 billion.

Monster discussed a potential deal with advisers, but considerations may not lead to a transaction, Bloomberg has reported. The exact structure of a potential tie-up couldn’t be immediately learned and it’s unclear whether discussions will lead to a full merger or asset deal.

Monster, which changed its name from Hansen Natural Corp. and ticker from HANS in Jan. 2012, gained 0.9% Monday, while Constellation fell 0.5%.

The report that they’re talking about a deal is “likely to come as a big surprise to investors,” Jefferies analyst Kevin Grundy wrote in a note, while Goldman Sachs analyst Bonnie Herzog wrote that the talks “are unexpected, given the limited strategic rationale of a combination between the two companies.”

(Updated in fourth paragraph with Monday’s trading)