Monster Beverage, a US-based energy drinks maker, has signed an agreement to buy flavour supplier American Fruits & Flavors (AFF) for $690m.

Following this purchase, Monster will be able to bring its primary flavor supplier in-house as well as acquire the intellectual property of some important flavours.

This deal will help Monster boost its flavor development and expand its footprint.

The deal is subject to customary closing conditions and regulatory approvals. It is slated to be close in the first quarter of this fiscal year.

AFF founder and president Fred Farago said: "It is important to acknowledge this transaction represents much more than the acquisition of AFF.

"We view today’s announcement as the integration of two companies that have enjoyed a tremendously symbiotic relationship over many years. We look forward to joining the highly respected and experienced Monster team to help the company further enhance its position as a global leader in the industry."

The transaction offers Monster ownership to intellectual property, which was created in collaboration with AFF, for its flagship ‘Monster Energy’ energy drinks along with several other flavours in Monster’s beverage portfolio.

Monster chairman and CEO Rodney C. Sacks said: "It is with great pleasure that we announce the acquisition of AFF as it marks a tremendous step in the continuing evolution of Monster.

"Not only have we secured the intellectual property of our flagship green energy drink and many of our other key flavors, but we are also partnering with an organization I have personally worked with and known for over 20 years.

"This transaction provides Monster a unique opportunity to leverage new flavor technologies and differentiate ourselves from our largest competitors who do not have these capabilities."

Monster vice chairman and president Hilton H. Schlosberg said: "The transaction is strategic to Monster and presents a unique opportunity for us to take ownership of our most important flavors. It is also beneficial from a growth perspective and enhances earnings per share.

"We have taken an important step by integrating our existing and new flavor development and flavor production under the umbrella of our ownership and are confident AFF will act as a catalyst for further success."

Since mid 1990s, the two firms have been collaborating since mid 1990s to develop new products and taste profiles.