Keurig Green Mountain has announced that it will repurchase 5.2m of its own shares from Italian coffee company Lavazza, in a transaction worth more than $620m.
The equivalent of $119.18 per share, the price represents a 3% discount on Keurig’s closing price on 20 February 2015. The coffee machine manufacturer has also amended a previous stock agreement, abolishing Lavazza’s “pre-emptive rights” to future issuances of the US-based company’s stock.
The deal will allow Lavazza to finance last month’s €600m acquisition of French coffee brands L’Or and Grand’Mère, which were sold to facilitate the merger between former owners Mondelēz and DE Master Blenders.
Shares in Keurig Green Mountain rose by almost 1% on Monday to a value of $124.06, following the announcement of the sale. Lavazza had already reduced its stake in the company by 1.2% earlier this month.
It follows news that Keurig was preparing to launch its Kold carbonated soda making machine, which negates the requirement for CO2 canisters of rival machines.
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