Coca-Cola invests $1.25 B in Green Mountain for pod-based cold beverages

The Coca-Cola Co. and Green Mountain Coffee Roasters Inc. (GMCR) have signed a 10-year agreement to collaborate on the development and introduction of Coca-Cola’s global brand portfolio for use in GMCR’s forthcoming Keurig Cold at-home beverage system.

February 6, 2014

The Coca-Cola Co. and Green Mountain Coffee Roasters Inc. (GMCR) have signed a 10-year agreement to collaborate on the development and introduction of Coca-Cola’s global brand portfolio for use in GMCR’s forthcoming Keurig Cold at-home beverage system. Under the global strategic agreement, GMCR and The Coca-Cola Co. will cooperate to bring the Keurig Cold beverage system to consumers around the world. In an effort to align long-term interests, the companies also entered into a Common Stock Purchase Agreement whereby The Coca-Cola Co. will purchase a 10% minority equity position in GMCR.

Under the terms of the equity agreement, Coca-Cola will acquire 16,684,139 newly issued shares in GMCR for approximately $1.25 billion, which represents an approximate 10% ownership in GMCR.

As part of the strategic collaboration, GMCR will be Coca-Cola’s exclusive partner for the production and sale of Coca-Cola-branded single-serve, pod-based cold beverages. The two companies also will explore other future opportunities to collaborate on the Keurig platform.

“This agreement demonstrates our creative approach to partnerships and ability to identify and stay at the forefront of consumer trends driving the industry,” said Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Co. “By pairing The Coca-Cola Co.’s brand leadership and global footprint with GMCR’s innovative technology, together we will be able to capitalize on the many exciting growth opportunities in the single-serve, pod-based segment of the cold beverage industry. Importantly, this partnership provides our consumers with a convenient way to enjoy the brands they love through in-home preparation.”

The investment is expected to close in March 2014, subject to customary closing conditions, including receipt of required regulatory approvals.

GMCR’s Keurig Cold single-serve beverage system is currently under development with expected availability in GMCR’s fiscal year 2015. Keurig Cold will use precisely formulated single-serve pods to dispense freshly-made cold beverages including carbonated drinks, enhanced waters, juice drinks, sports drinks, and teas in consumers’ homes.

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