Keurig agrees to $13.9bn buyout by private investors

Keurig Green Mountain, the struggling maker of single-cup coffee pods and brewers, said Monday it is being bought for $13.9 billion by private investors led by JAB Holding Company.

The acquisition was approved unanimously by Keurig's board, including its largest stakeholder Coca-Cola, which owns 17.4 percent, Keurig said in a statement.

The JAB-led group of private investors will acquire Keurig for $92 per share in cash, in a deal valued at $13.9 billion. That represents a 78 percent premium over Keurig's closing stock price of $51.70 on Friday.

"Keurig Green Mountain represents a major step forward in the creation of our global coffee platform. It is a fantastic company that uniquely brings together premium coffee brands and new beverage-dispensing technologies like the famous Keurig single serve machine," said Bart Becht, chairman of JAB, in the statement.

The transaction is expected to close during the first quarter of 2016. After the acquisition, the company will be operated independently and remain headquartered in Waterbury, Vermont.

The deal should prove a bonanza for investors who have watched the struggling company's stock plummet 61 percent over the past 12 months, from $131.70 on December 8, 2014.

Keurig has been facing stiff competition for its K-Cup coffee pods and push-button brewers. Sales in the fourth quarter of its fiscal year ended September 26 dropped 13 percent from a year ago to $1.0 billion. Pod sales dropped nine percent and sales of brewers and accessories plunged 32 percent. Net income in the quarter fell 33 percent to $94.6 million.

For the full-year fiscal 2015, Keurig reported sales fell four percent and net income dropped 16 percent.

"We look forward to working with JAB, an experienced operator with a successful track record of investing in and growing consumer companies," said Muhtar Kent, chairman and chief executive of The Coca-Cola Company, in the statement.

JAB Holding manages the fortune of the rich Reimann family of Germany and hold stakes in cosmetics company Coty, luxury shoemaker Jimmy Choo, and Jacobs Douwe Egberts, a Netherlands-based global coffee giant.

JAB also owns controlling stakes in Peet's Coffee & Tea and Caribou Coffee Company and coffee chain shops in Europe.

JAB's other partners in the buyout include US snacks giant Mondelez International and affiliates of BDT Capital Partners.

Irene Rosenfeld, chairman and CEO of Mondelez International, called Keurig "a strategic asset that provides immediate access to the US, the largest coffee market in the world, and to on-demand, the fastest growing segment of the market."

About 30 minutes into trade, shares in Keurig soared 73.4 percent to $89.50. Coca-Cola dipped 0.1 percent to $43.26 and Mondelez fell 0.9 percent to $44.10.