Coffee maker and instant flavor pod manufacturer Keurig Green Mountain announced today it has agreed to enter a definite merger worth $13.9 billion with an investment group led by German private-equity firm JAB Holding Co.
JAB's acquisition has been done in partnership with companies that are already shareholders in Jacob Douwe Egberts, a tea and coffee company formed in 2014, including Mondelez International and companies affiliated with BDT Capital Partners, according to Business Wire.
The deal values Keurig at $92 per share in cash, or a total equity value of about $13.9 billion, and marks a 77.9 percent premium over Friday's closing stock price.
The agreement has been unanimously approved by Keurig Green Mountain's board of directors, and is backed by shareholder Coca-Cola, who spearheaded the effort two months ago to introduce the Keurig KOLD system, a machine that allows owners to make carbonated drinks at home, according to USA Today.
"The Coca-Cola Company is fully supportive of this transaction," said Muhtar Kent, the chairman and CEO of the Coca-Cola Company. "We have enjoyed a strong partnership with Keurig Green Mountain, and will continue our collaboration with JAB in order to capitalize on the growth opportunities in the single-serve, pod-based segment of the cold beverage industry. We look forward to working with JAB, an experienced operator with a successful track record of investing in and growing consumer companies."
The transaction is not subject to a financing condition and is expected to close during the first quarter of 2016. Once it does, Keurig Green Mountain will be privately owned and will remain operated by the company's management team and employees. Furthermore, the company will remain at its Waterbury, Vt., headquarters, according to the Wall Street Journal.
News of the merger was well-received, with Keurig's stocks rising 76 percent to $90.83 in pre-market trading.
