Keurig sold for $14 billion

Published 2:08 pm Wednesday, December 9, 2015

Coffee giant being bought by European investors

By Diana McFarland

News editor

Keurig Green Mountain Inc., which has a facility in Windsor, announced Monday that it is being sold to a private investment group for about $14 billion.

The merger agreement between Vermont-based Keurig and a JAB Holding Company will be finalized early next year and must be approved by stockholders, according to a company press release.

The cash sale is twice that of Smithfield Foods, which was sold to Hong Kong-based Shuanghui, now WH Group in 2013 for about $7 billion.

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Europe-based JAP Holdings is focused on luxury goods, coffee and healthcare. {mprestriction ids=”1,2,3,4,5,6″}

Keurig’s facility in Isle of Wight County’s intermodal park employs more than 500 people.  It is the fourth largest employer in Isle of Wight County.

Isle of Wight County Board of Supervisors Chairman Rex Alphin said the news came as a surprise and he didn’t know if anyone locally was aware the sale was underway.

It’s unclear right now what the ramifications are, but, based on the details of the sale, it appears the company has value, he said.

The sale, at $92 a share, represents a 78 percent premium over Keurig Green Mountain’s closing stock price on Dec. 4.

Keurig Green Mountain will be privately owned and will continue to be operated independently by the company’s management team and employees. Keurig Green Mountain will remain headquartered in Waterbury, Vermont, according to a company press release.

Keurig came to Isle of Wight in 2011 with $7.9 million in local incentives, including discounts on the machinery and tools tax and real estate taxes through 2021. The company was also eligible for an enterprise zone grant for each new full time position created before 2016, among other incentives. The local incentives are in addition to a $4 million opportunity grant from the state.

“I’m hoping they’re (the incentives) are still in place and those goals that were there were carried forward,” Alphin said.

“Hopefully they’ll continue to grow.”

Efforts to reach company officials were unsuccessful.

Keurig is best known for creating the Keurig K-cup — an individual coffee brewing system, along with its brewing system. The patent on the Keurig Green Mounain’s single serve K-cup expired in 2012, which opened the market to competitors.

Coca-cola Co. bought a 10 percent stake in the company in 2014.

“The Coca-Cola Company is fully supportive of this transaction,” said Muhtar Kent, 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.” {/mprestriction}