Keurig Green Mountain, Inc. (NASDAQ:GMCR) skyrocketed 72.15% to $89. Keurig Green Mountain, declared that the companies have reached a definitive merger agreement under which a JAB-led investor group will acquire Keurig Green Mountain for $92.00 per share in cash, or a total equity value of about $13.9 billion. The agreement, which has been unanimously approved by Keurig Green Mountain’s Board of Directors, represents a premium of about 77.9% over Keurig Green Mountain’s closing stock price on December 4, 2015.
JAB is acquiring Keurig Green Mountain in partnership with planned minority investors who are already shareholders in Jacobs Douwe Egberts B.V., (“JDE”), counting Mondelēz International and entities associated with BDT Capital Partners. At the close of the transaction, Keurig Green Mountain will be privately owned and will continue to be operated independently by the company’s administration team and employees. Keurig Green Mountain will remain headquartered in Waterbury, VT.
Bart Becht, Chairman at JAB commented, “Keurig Green Mountain represents a major step forward in the creation of our global coffee platform. It is a fantastic company that uniquely brings together premium coffee brands and new beverage dispensing technologies like the famous Keurig single serve machine. Keurig Green Mountain will operate as an independent entity to ensure it will further build on its coffee & technology strength and continue to serve all its partners to the best of its abilities.”
Keurig Green Mountain, Inc. produces and sells coffeemakers and specialty coffee in the United States, Canada, and internationally. The company sources, produces, and sells coffee, hot cocoa, teas, and other beverages under K-Cup, Vue, Rivo, K-Carafe, K-Mug, and Kold brands; and coffee in traditional packaging, counting bags and fractional packs, in addition to offers whole bean and ground coffee in bags, fractional packages, and cans.
On other hand, Office Depot, Inc. (NASDAQ:ODP), lost -15.45% to $5.61. Staples, Inc. (NASDAQ: SPLS) and Office Depot, Inc. (NASDAQ: ODP) declared that they intend to contest the U.S. Federal Trade Commission’s decision to challenge the merger of the two companies. The companies were informed of the FTC’s decision earlier today.
The projected acquisition would benefit customers, employees and shareholders, and the companies look forward to a full, impartial judicial review of the competitive effects of the transaction.
Staples and Office Depot will demonstrate that the FTC’s decision is based on a flawed analysis and misunderstanding of the intense competitive landscape in which Staples and Office Depot compete. In fact, the FTC’s decision to contest the merger contradicts its own unanimous ruling in the Office Depot – OfficeMax merger in 2013, in which the commission declared the market highly competitive. At the time, the FTC ruled that Staples and Office Depot face “strong competition” from “a host” of competitors. The office products landscape has grown even more competitive since then.
The acquisition is predictable to generate more than $1 billion of net synergies over the three-year integration period as the combined company aggressively reduces global expenses and optimizes its retail footprint. The savings will dramatically accelerate Staples’ planned reinvention, which is focused on driving growth in delivery businesses and in categories beyond office supplies.
Office Depot, Inc., together with its auxiliaries, supplies office products and services. The company’s North American Retail division sells an assortment of merchandise, counting office supplies, technology products and solutions, business machines and related supplies, facilities products, and office furniture under various brands through its chain of office supply stores.