JAB Holding seeks to raise $2.5bn with Keurig Dr Pepper share sale

The move will likely see JAB lower its stake in KDP from 34% to 21% | Photo credit: via Shutterstock

JAB Holding Company is seeking to lower its stake in US coffee and soft beverages group Keurig Dr Pepper (KDP) in a bid to raise approximately $2.5bn. 
 

In a press release, KDP said a subsidiary of JAB will sell an aggregate of 86,956,522 shares through a secondary offering, with Texas-based KDP intending to repurchase approximately 35 million shares. Underwriter Morgan Stanley has also been granted an option to purchase an additional 13,043,478 shares. 

Assuming all 100 million shares are purchased, the move will see JAB lower its stake in KDP from 34% to 21%. 

“KDP will continue to be one of our most important investments and we expect to continue to be a long-term anchor shareholder in KDP, at or above the 20% ownership level,” said Joachim Creus, CEO of JAB Holding. 

JAB will reportedly use the proceeds to finance investments in its pet insurance division, which includes the Pinnacle and Pumpkin brands. 
 

Luxembourg-based JAB Holding Company formed KDP in July 2018 following the merger of the Keurig Green Mountain coffee business and soft drinks manufacturer Dr Pepper Snapple Group.  

At the time of the deal JAB Holding held a 73% stake in KDP. However, the conglomerate has consistently lowered its stake in the beverage group, most recently in November 2020. 

KDP posted 5% year-on-year net sales growth last year to reach $14.8bn, with adjusted net income rising 4% to $2.5bn. However, ‘sluggish’ at-home coffee consumption negatively impacted its 2023 US coffee segment sales – which fell 5% to $4.1bn.  

JAB Holding’s coffee portfolio also includes JDE Peet’s, Pret A Manger, Espresso House, Krispy Kreme, Inteligentsia Coffee and Panera Brands – which comprises the Panera Bread, Caribou Coffee and Einstein Bros. Bagels brands. The group’s total managed capital stood in excess of $50bn as of June 2023.