Coca-Cola buying maker of Vitaminwater

Soft-drink maker Coca-Cola Co. said Friday it will buy Vitaminwater maker Glacéau for $4.1 billion US in cash, in a move to expand its non-carbonated beverage line.

The acquisition of Glacéau, formally known as Energy Brands Inc., is expected to add to Coke's earnings per share in the first full year following the deal's closing this summer.

The boards of both companies have approved the transaction.

"Glacéau has built a great business with high-quality growth, as well as a strong pipeline of innovative products and brands," said Neville Isdell, chairman and chief executive of Coca-Cola. "We envision even faster growth for Glacéau as part of Coca-Cola's enhanced range of brands for North American customers and consumers."

In addition to Vitaminwater, Glacéau also makes Smartwater, Fruitwater and Vitaminenergy brands. Coke said enhanced water and energy drink categories are expected to make up a large portion of the beverage industry's volume and gross profit growth in North America through 2010.

Whitestone, N.Y.-based Glaceau will operate as a separate business unit within Coca-Cola North America, and its top three executives— J. Darius Bikoff, Mike Repole and Mike Venuti— plan to lead the business for a minimum of three years after the deal closes. Other key managers will remain in the business, Coke said.