updated 5/25/2007 9:50:54 AM ET 2007-05-25T13:50:54

The Coca-Cola Co., which has been looking to expand its water and energy drink portfolio, said Friday it has agreed to buy Vitaminwater maker Glaceau in a cash deal valued at $4.1 billion.

The world's largest beverage maker said the agreement to acquire Energy Brands, Inc., known as Glaceau, provides Atlanta-based Coca-Cola with a strong platform to grow its active lifestyle beverages.

The transaction is expected to be accretive to Coca-Cola's earnings per share in the first full year following completion of the acquisition, Coca-Cola said in a statement.

Formed in 1996 and based in Whitestone, N.Y., Glaceau is the maker of Vitaminwater, Fruitwater, Smartwater and Vitaminenergy.

The deal to buy Glaceau, which will operate as a separate business unit within Coca-Cola's North America segment, is expected to close in the summer. It is subject to regulatory review. The boards of both companies have approved the transaction.

Glaceau is an attractive acquisition for Coca-Cola because of its position in the enhanced water and energy drink categories, which Coca-Cola is betting will make up a large portion of the beverage industry's volume and gross profit growth in North America through 2010.

Coca-Cola said Glaceau's top three executives intend to lead the business for at least three years, and that other key managers will remain in the business.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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