Keurig Green Mountain to be taken private for $13.9 billion

December 7, 2015 09:54 AM

Keurig Green Mountain Inc, the maker of K-Cup single-serve coffee pods, said on Monday it would be bought by an investor group led by Germany's JAB Holding Co (JAB) for about $13.9 billion, creating a global coffee giant.

This is the latest in a string of coffee deals by JAB as it seeks to become a formidable competitor to Nestle SA, which operates the world's biggest coffee business.

JAB formed a joint venture in July called Jacobs Douwe Egberts - now the largest pure-play coffee company - by combining its D.E. Master Blenders 1753 business with the coffee business of Mondelez International Inc.

JAB, the investment vehicle of the billionaire Reimann family of Germany, bought coffee companies Caribou Coffee Co and Peet's Coffee & Tea in 2012.

JAB's $92.00 per share cash offer represents a 78 % premium to Keurig's Friday close. Keurig's shares were trading at $90.56 before the opening bell on Monday.

Coca-Cola Co, Keurig's biggest single shareholder, said it was supportive of the deal. As of Dec. 6, Coke had a 17.4 % stake in the Vermont-based company, valuing its holding at about $2.4 billion at the offer price.

JAB is acquiring Keurig in partnership with investors who are already shareholders in Jacobs Douwe Egberts, including Mondelez and entities affiliated with BDT Capital Partners.

JAB's other holdings include controlling stakes in cosmetics company Coty Inc and luxury goods makers Jimmy Choo.

The deal is expected to close in the first quarter of 2016.

BofA Merrill Lynch and Credit Suisse provided fairness opinions to Keurig Green Mountain.

Up to Friday's close, Keurig's shares had fallen more than 60 % this year.

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Sruthi Ramakrishnan, Reuters