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Green Mountain Coffee Signs Massive Deal With Coca-Cola

Green Mountain Coffee Roasters, Inc. announced a massive partnership with Coca-Cola, which some say could change the way soda is consumed at home.
Posted at 11:49 AM, Feb 06, 2014

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.