Is it time for Coca-Cola (NYSE:KO) to finally buy Monster Beverage (NASDAQ:MNST)? Despite the legal troubles that hover around the energy drink maker, an acquisition still makes sense as it could give a boost to declining soft drink sales, but valuations make the possibility of achieving a deal difficult to imagine.

These two companies have had interactions before, with Coca-Cola reportedly pursuing the possibility in 2012 but unable to actually pull the trigger. Certainly Coke is interested in making bolt-on acquisitions, as its willingness to spend more than $2 billion on a partnership with Keurig Green Mountain (NASDAQ: GMCR) to develop branded at-home cold beverage machines suggests the beverage giant recognizes it badly needs to bolster flagging interest in carbonated soft drinks.

In 2007, Coke paid $4.2 billion to buy Vitaminwater, its biggest brand acquisition, and last year it acquired coconut water maker Zico, following the path it's setting again with Keurig of establishing a stake, acquiring a majority position, and then completing the takeover last November.

With worldwide sparkling beverage volumes down 1% in the first quarter, diet sodas remain under pressure and its once-favored Diet Coke is in free fall.

Screen Shot

Source: Beverage Digest.

Coke already has extensive agreements in place with Monster for distribution, and it accounted for 29% of the energy drink maker's $2.59 billion in revenues in 2013. Monster reported a near-11% increase in net sales in the first quarter of the current year, generating a 50% increase in net income.

Energy drinks are also displacing soda on store shelves. Earlier this year it was expected that energy drinks would see shelf space in convenience stores expand by 50% to command over 30% of the total. So the growth Monster's experienced, even in the face of ongoing health concerns, means any offer would have to carry a hefty premium. Bloomberg estimates the company's sales will widen by 53% through 2017, surpassing every other beverage company in the U.S. valued at above $50 million, including PepsiCo and Dr Pepper Snapple..  

Although such growth should warrant hefty premiums, the cloud of lawsuits that follow the energy drink maker are worth considering. While two product liability cases are related to the deaths of two teens allegedly caused by excessive consumption of Monster drinks, the company is also facing charges of channel stuffing that extend all the way back to 2008 and probes over whether it improperly marketed its drinks to kids.

The question for Coke then becomes: If Monster can resolve its legal problems, is the price it would have to pay to acquire the energy drink maker's growth as a means of offsetting its own slack sales worth the price it would have to pony up? It just might be willing to do so, but it might not be alone in thinking Monster's a worthy brand to stick in a portfolio.

Anheuser-Busch InBev has also been a rumored candidate for taking over the drinks maker, and it is contending with sluggish growth of its own. If Coke were to continue delaying making a decision, it might be willing to step in. With its own distribution deals in place with Monster, it's another logical choice.

Monster Energy hasn't gotten any cheaper over the years after the various feints Coca-Cola's made at buying the company, and even with lawsuits pending, it doesn't seem like it's going to be much cheaper in the future. Coke may need to act sooner rather than later, all of which suggests that Monster, despite the 25% increase in the value of its shares over the past year, is still a good stock to own.

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Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, Keurig Green Mountain, Monster Beverage, and PepsiCo. The Motley Fool owns shares of Monster Beverage and PepsiCo and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.