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Your beloved K-Cups could soon be Coke cups. Green Mountain Coffee Roasters announced a
massive strategic partnership with Coca-Cola Wednesday.
The company issued a press release and a statement from Brian Kelley, Green Mountain CEO, which
reads in part, "We believe there is significant opportunity to premiumize and accelerate growth
in the cold beverage category."
It's a 10-year agreement, and the terms of the deal are a little complex. So we'll break
it down for you.
Coca-Cola purchased a 10 percent equity stake in Green Mountain for $1.25 billion.
Coke got approximately 16,700,000 newly issued shares at an average price of $74.98 per share.
Before the announcement, the two caffeinated companies were quickly becoming rivals. But
just one day later, the partnership is already proving lucrative for both companies.
Shares of Green Mountain stock surged on the news.
"If you own GMCR this morning, maybe throw a little Bailey's in your coffee, because
celebrate. Take the day off work. The stock is up 42 percent right now!" (Via CNBC)
The move is an incredible boost for Green Mountain as they'll now have help from one
of the world's most powerful distributors. Some even say it could change the way we drink
soda.
"They're making the Keurig Cold, which you'll probably see later this year. You can make
cold drinks like Powerade, Coke, Fanta, Sprite. So if you're on your way to the gym, you can
make your own Powerade." (Via WAGA)
The new machine and partnership takes direct aim at SodaStream, an at-home soda maker,
and could wipe them right off the map. Forbes notes it was already a rough year for SodaStream
before this latest announcement. (Via YouTube / SodaStreamGuru)
The deal is expected to close in March, and Coca-Cola says it doesn't think the Keurig
Cold will affect its in-store sales.