Coca-Cola agreed on Wednesday to buy a 10 percent stake in Green Mountain Coffee Roasters, as it seeks to cement ties with the fast-growing coffee company.
Under the terms of the deal, Coke will buy about 16.7 million shares in Green Mountain for about $1.25 billion. The shares were priced at $74.98 each, representing the volume-weighted average price for the last 50 days.
In return, Green Mountain will be the official maker of the soda giant’s single-serve cold beverages, built on its popular Keurig pod-based system. Some of the proceeds from the investment will go toward expansion of the Keurig Cold product.
“This global relationship combines The Coca-Cola Company’s unparalleled brand, distribution and marketing strengths with GMCR’s innovative technology and beverage system expertise,†Brian P. Kelley, Green Mountain’s chief executive, said in a statement, referring to his company’s ticker symbol.
News of Wednesday’s deal sent shares in Sodastream, one of the biggest makers of at-home soda machines, tumbling more than 8 percent in after-hours trading.
To alleviate dilution caused by the new stock issuance, Green Mountain will buy back additional shares. The deal is expected to close next month.
Green Mountain was advised by Bank of America Merrill Lynch and the law firm Baker & McKenzie.
