Fevertree shares soar as Molson Coors takes stake, gains US distribution rights

Recasts paragraph 1, updates shares in paragraph 2, adds analyst comment paragraph 6, background in paragraph 10

By Shashwat Awasthi

Jan 30 (Reuters) - Shares of Fevertree Drinks FEVR.L surged almost 24% after Molson Coors' TAP.N took an 8.5% stake in the firm, in a deal giving the beer giant exclusive rights to market the British company's cocktail mixers and tonic water in the United States.

The $88 million deal comes months after Carlsberg CARLb.CO agreed to buy British soft drinks maker Britvic BVIC.L for $4.2 billion in a move the Danish brewer said would create a UK beverage powerhouse.

Fevertree, which generates more than a third of its revenue in the United States, forecast low-single-digit growth for 2025 as the partnership takes effect, double-digit growth in 2026, and a sustained increase in medium-term revenue.

"Whilst full-year 2025 will be a transition year, the deal is a game changer for Fevertree's potential earnings power," Jefferies analysts said in a note.

Shares in Molson Coors inched up 0.5% in pre-market trading.

The company has been grappling with a hit to volumes in the United States amid higher prices, and has looked to expand beyond alcoholic beverages.

In November, it forecast lower full-year sales and said it would buy a majority stake in ZOA Energy, a drinks company co-founded by Hollywood actor Dwayne "The Rock" Johnson.

Fevertree, known for its cocktail mixers, tonic water, ginger beers, and flavoured sodas, said U.S. revenue grew 12% at constant currency in 2024.

"It looks like an interesting deal for Fevertree as it gets to leverage the Molson Coors platform both on production and distribution," analysts at Peel Hunt said in a note.

Fevertree, a name derived from the colloquial term for the tree whose bark produces a key ingredient in tonic water, said it would return proceeds from the stake sale to shareholders via a share buyback.