Keurig Green Mountain Inc. (NYSE:GMCR) will be acquired by an investor group led by JAB Holding Co. for about $13.9 billion in cash. After the announcement on Monday, its share price increased more than 70% to almost $90 dollars per share.
The offer price represents nearly a 78% premium over Friday's closing price for Keurig shares. According to Bloomberg Data, The 78% premium is the largest premium ever in beverage-industry history for any acquisition deal above $5 billion.
The deal compensates the investors after the weak results and dimming prospects weighed on the stock this year. Keurig shares had been down 61 percent this year through the end of last week. The company has suffered from decreasing sales of its K-Cup containers and lower prices on brewers. What’s more, the new cold brewer is rolling out more slowly than expected. The strong dollar also is diminishing international sales.
The deal is expected to close during the first quarter of 2016.
According to Bart Becht, JAB’s chairman, “Keurig Green Mountain will operate as an independent entity to ensure it will further build on its coffee and technology strength.”
The deal suggests that the potential synergy among Keurig and JAB's other coffee properties — including Jacobs Douwe Egberts, Peet's Coffee & Tea and Caribou Coffee — may benefits JAB as JAB seeks to reverse Keurig's fortunes.
JAB is a closely-held investment firm based in Luxembourg that manages the $16 billion fortune of Austria’s Reimann family. Its diversified holdings include Jimmy Choo shoes and Coty fragrances.