Coca-Cola buys 40% of honest tea for $43m

Feb. 5 (Bloomberg) - Coca-Cola Co., the world's biggest soda maker, agreed to pay $43 million for a stake in Honest Tea Inc, as it tries to get beyond fourth place in the bottled tea market.

The purchase gives Coca-Cola 40 percent of the maker of organic low-calorie bottled tea, as well as an option to buy the rest of the company after three years, Seth Goldman, Honest Tea's co-founder and chief executive officer, said today in an interview. Coca-Cola's stake in the closely held company may help it win back consumers who have cut back on sugary sodas.

Honest Tea, based in Bethesda Maryland, uses small amounts of honey or cane sugar in some of its teas. An 8-ounce serving of Honest Tea generally contains from 17 to 35 calories, compared with 100 calories in a similar serving of Coca-Cola. "We expect this to be one of many acquisitions" in the next two years as Coca-Cola diversifies beyond carbonated beverages.