For Immediate Release
Chicago, IL – December 09, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Keurig Green Mountain, Inc. ( GMCR ), Coca-Cola Company (KO), Mondelez International, Inc. ( MDLZ ) and Dr Pepper Snapple Group, Inc. (DPS).
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Here are highlights from Tuesday’s Analyst Blog:
How Coca-Cola Wins from JAB's $13.9 Billion Keurig Buyout
Who says someone’s loss is someone’s gain? Here’s a merger which is a win-win for all the parties involved.
Keurig Green Mountain, Inc. ( GMCR ), on Monday, announced its decision to go private pushing its share price 72% higher than Friday’s close. This proved to be great news forThe Coca-Cola Company ( KO) which owns around 17% stake in specialty coffee retailer.
Keurig entered into a deal to be acquired by an investor group led by Germany's JAB Holding for $13.9 billion or $92 per share — a premium of around 78% to Friday’s closing price. The group also includes Mondelez International, Inc. ( MDLZ ) and affiliates of BDT Capital Partners.
Coca-Cola reportedly stands to make a profit of around $25.5 million on its investment in Keurig, if the merger gets through. Prior to the announcement, this investment was reportedly worth a loss of approximately $1 billion.
Coca-Cola bought 10% stake in Keurig Green Mountain in Feb 2014 and subsequently increased it to 17% this year.
Coca-Cola also has an innovative partnership with Keurig Green Mountain under which the latter will exclusively make Coca-Cola branded single-serve pods for its Keurig Cold at-home beverage system. Keurig Kold, which debuted in late September, is a beverage system that allows consumers to brew fresh cold sparkling and still beverages at home.
However, Keurig Kold proved to be a dampener and the roll-out was slower than expected because of its steep price. Keurig has been suffering from waning sales of its K-Cup packs as well as brewers.
A couple of analysts are of the opinion that if Keurig’s buyers can make Keurig Cold a success, it should benefit Coca-Cola as the deal opens up an exciting new packaging format for Coca-Cola’s brands. Keurig has also inked a similar deal with another beverage company, Dr Pepper Snapple Group, Inc. ( DPS).
JAB is a private investment firm which owns majority stakes in other coffee companies like Jacobs Douwe Egberts ("JDE"), Peet's Coffee & Tea and Caribou Coffee.
Both Coca-Cola and Keurig Green Mountain carry a Zacks Rank #3 (Hold).
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