Summary
Mondelez International, Inc. (MDLZ) announced on January 29, 2018, that its ownership interest in Keurig Green Mountain, Inc. will be exchanged for an equity interest in the new combined company, Keurig Dr Pepper (KDP), upon the closing of the merger between Keurig and Dr Pepper Snapple Group. Mondelez will not be investing additional capital into KDP. This strategic move is expected to result in Mondelez holding a 13-14% equity stake in KDP, a reduction from its current 24.24% ownership in Keurig. The transaction is significant for Mondelez as it will transition its investment from a direct ownership in Keurig to a passive equity stake in a larger, publicly traded entity. While Mondelez will have the right to nominate two directors to KDP's board initially, this right is contingent on its equity ownership percentage. The filing also notes a six-month lock-up period post-closing during which Mondelez will be restricted from selling its KDP shares.
Key Highlights
- 1Mondelez International will exchange its current ownership in Keurig Green Mountain for an equity interest in the newly formed Keurig Dr Pepper (KDP) upon completion of the Keurig-Dr Pepper merger.
- 2Mondelez will not be contributing new capital to the combined KDP entity.
- 3Mondelez's current 24.24% ownership in Keurig is expected to translate into a 13-14% equity interest in KDP.
- 4Following the transaction, Mondelez will have the right to nominate two directors to KDP's board, subject to maintaining a certain ownership threshold.
- 5Mondelez's ability to nominate directors will decrease to one if its equity interest falls below 8%, and will be lost if it falls below 5%.
- 6Mondelez is subject to a six-month lock-up period on its KDP shares after the transaction closes, preventing immediate sale or disposal.
- 7The filing includes forward-looking statements regarding the transaction and Mondelez's future involvement with KDP.