Coca-Cola stepped up its investments in alternative beverages Thursday, acquiring a 17% stake in energy drink marketer Monster Beverage.

"Coca-Cola certainly needs growth,'' says Bill Chapell of Sun Trust Robinson Humphrey. "Monster has a leading share in the U.S. energy drink market and they have been gaining share overseas. It's a nice shot in the arm for Coca-Cola going forward.

Monster Beverage, which will receive $2.15 billion, is soaring 26% to $90 in after-hours trading.

The long-term partnership between the aging soft-drink giant and the upstart energy drink marketer is designed to accelerate sales in the fast-growth energy drink sector, which Monster has a No. 1 share. Coca-Cola, which already distributes Monster products, will become Monsters' preferred distribution partner, while Monster will transfer its non-energy brands, including Hansen's Natural Sodas and Peace Tea, to Coca-Cola.

"Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category,'' says Coca-Cola CEO Muhtar Kent. "This long-term partnership aligns us with a leading energy player globally, brings financial benefit to our company and our bottling partners, and supports broader commercial strategies with our customers to bring total beverage growth opportunities that will also benefit our core business."

Coca-Cola, which nearly acquired Monster outright in 2012, has faced declining soft drink consumption in North America and overall global soda sales growth is likely to decline for the third straight year. While Coca-Cola has diversified into juices, bottled water, Powerade and Keurig Green Mountain coffees, carbonated beverages still account for over 70% of sales volume.