Keurig Dr Pepper Announces Pricing of Secondary Offering of Common Stock by JAB

Rhea-AI Summary

Keurig Dr Pepper (NASDAQ: KDP) has announced the pricing of a secondary offering of 73 million shares by JAB Holding Company subsidiary at $32.80 per share. JAB has granted the underwriter a 30-day option to purchase up to an additional 10.95 million shares.

Following the completion of the offering, JAB's beneficial ownership in KDP will decrease to approximately 10.7% of outstanding common stock. The remaining shares owned by JAB will be subject to a 90-day lock-up agreement with the underwriter. J.P. Morgan is acting as the sole underwriter for this secondary offering.

KDP, a leading North American beverage company with annual revenue exceeding $15 billion, maintains a portfolio of over 125 owned, licensed, and partner brands, including notable names such as Dr Pepper, Canada Dry, Snapple, and Green Mountain Coffee Roasters.

Positive

• Large-scale offering indicates strong market interest
• Clear ownership structure post-offering at 10.7%
• Strong revenue base of $15+ billion annually
• Diverse portfolio of 125+ brands

Negative

• Significant reduction in JAB's ownership stake
• Large share offering may impact stock price
• Potential market oversupply of shares
• Lock-up period may create future selling pressure

Insights

Financial Analyst

JAB Holding Company is executing a significant divestment by pricing a secondary offering of 73 million KDP shares at $32.80 per share—representing a 2.8% discount to the current market price. This $2.4 billion transaction will reduce JAB's ownership stake in KDP to approximately 10.7%, continuing JAB's multi-year reduction of its position following the 2018 Keurig-Dr Pepper merger.

This offering materially changes KDP's shareholder structure and could have several market implications:

• The substantial increase in public float should enhance trading liquidity, potentially attracting institutional investors who previously avoided KDP due to float
• JAB's reduced influence could lead to governance changes and potentially open the door for strategic alternatives that weren't previously feasible
• The below-market pricing suggests some urgency in JAB's divestment timeline, which could create near-term selling pressure

From JAB's perspective, this move aligns with their broader portfolio rebalancing, having similarly reduced stakes in other consumer holdings like JDE Peet's. For KDP, the reduced presence of a controlling shareholder could allow management more strategic flexibility, though it may also create uncertainty around long-term direction.

The timing is notable as it comes when consumer staples companies face margin pressures from inflation and shifting consumer preferences. With JAB's stake diminishing and the 90-day lock-up on their remaining shares, KDP could become more vulnerable to activist involvement or even acquisition interest from larger beverage competitors seeking to expand their portfolio.

BURLINGTON, Mass. and FRISCO, Texas, Feb. 27, 2025 /PRNewswire/ -- Keurig Dr Pepper (NASDAQ: KDP) (the "Company" or "KDP") announced today the pricing of its previously-announced registered public offering of 73,000,000 shares through a secondary offering by a subsidiary of JAB Holding Company s.a.r.l. ("JAB"), at a price to the public of $32.80 per share.  JAB has also granted the underwriter a 30-day option to purchase up to an additional 10,950,000 shares.

Following the completion of the offering, JAB will beneficially own approximately 10.7% of KDP's outstanding common stock.  The remaining shares beneficially owned by JAB will be subject to a 90-day lock-up agreement with the underwriter.

J.P. Morgan is acting as the underwriter for the secondary offering.

The offering will be made only by means of an effective registration statement and a prospectus. The Company has previously filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement (including a prospectus) on Form S-3 (File No. 333-266989) and a prospectus supplement, each dated August 19, 2022, as well as a preliminary prospectus supplement for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the accompanying prospectus supplements and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. The offering will be made only by means of a prospectus and a related prospectus supplement relating to the offering, copies of which may be obtained from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at 866-803-9204 or by email at prospectus-eq_fi@jpmchase.com. These documents can also be accessed through the SEC's website at www.sec.gov. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Investors:
Investor Relations
Keurig Dr Pepper
T: 888-340-5287 / IR@kdrp.com

Media:
Katie Gilroy
Keurig Dr Pepper
T: 781-418-3345 / katie.gilroy@kdrp.com

About Keurig Dr Pepper

Keurig Dr Pepper (Nasdaq: KDP) is a leading beverage company in North America, with a portfolio of more than 125 owned, licensed and partner brands and powerful distribution capabilities to provide a beverage for every need, anytime, anywhere. With annual revenue of more than $15 billion, we hold leadership positions in beverage categories including carbonated soft drinks, coffee, tea, water, juice and mixers, and have the #1 single serve coffee brewing system in the U.S. and Canada. Our innovative partnership model builds emerging growth platforms in categories such as premium coffee, energy, sports hydration and ready-to-drink coffee. Our brands include Keurig®, Dr Pepper®, Canada Dry®, Mott's®, A&W®, Peñafiel®, Snapple®, 7UP®, Green Mountain Coffee Roasters®, GHOST®, Clamato®, Core Hydration® and The Original Donut Shop®. Driven by a purpose to Drink Well. Do Good., our 29,000 employees aim to enhance the experience of every beverage occasion and to make a positive impact for people, communities and the planet.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein are "forward-looking statements" within the meaning of applicable securities laws and regulations. These forward-looking statements can generally be identified by the use of words such as "outlook," "guidance," "anticipate," "expect," "believe," "could," "estimate," "feel," "forecast," "intend," "may," "plan," "potential," "project," "should," "target," "will," "would," and similar words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on the current expectations of our management, are not predictions of actual performance, and actual results may differ materially.

Forward-looking statements are subject to a number of risks and uncertainties, including the factors disclosed in our Annual Report on Form 10-K, the prospectus supplements and subsequent filings with the SEC. We are under no obligation to update, modify or withdraw any forward-looking statements, except as required by applicable law.

 

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SOURCE Keurig Dr Pepper

FAQ

What is the price per share for KDP's secondary offering by JAB?

The secondary offering is priced at $32.80 per share for 73 million shares.

How many additional shares can be purchased through JAB's option to the underwriter?

JAB granted a 30-day option to purchase up to 10.95 million additional shares.

What will be JAB's ownership percentage in KDP after the offering?

JAB will beneficially own approximately 10.7% of KDP's outstanding common stock after the offering.

How long is the lock-up period for JAB's remaining KDP shares?

JAB's remaining shares will be subject to a 90-day lock-up agreement with the underwriter.