Green Mountain Coffee Roasters (GMCR) was flying high after the bell Wednesday following the announcement of a 10-year collaboration agreement with Coca-Cola (KO) that includes Coca-Cola taking a 10% equity stake in the Keurig parent.
The news sent GMCR stock as much as 45% higher in after-hours trading and also extended Sodastream’s (SODA) losses, as SODA stock was down nearly 10% after Wednesday’s bell.
According to a release, Green Mountain and Coca-Cola will cooperate to bring Coke’s portfolio of drinks to the new Keurig Cold beverage system, which would be pitted against Sodastream’s line of soda-making machines.
GMCR will be Coca-Cola’s exclusive partner in the venture, and will produce Coca-Cola Company-branded single-serve, pod-based cold beverages. According to the release, Green Mountain and Coca-Cola “also will explore other future opportunities to collaborate on the Keurig platform.”
Coca-Cola will acquire 16,684,139 newly issued shares of GMCR stock for about $1.25 billion, or $74.98 per share, representing about 10% of Green Mountain shares after the creation of the new equities.
Following a cratering in GMCR stock spurred in large part by Starbucks’ (SBUX) entry into the single-serve game with the Vue, Green Mountain shares have bounced back more than 300% off their 2012 bottom. That includes a 75% run in GMCR stock over the past 52 weeks.
Meanwhile, Sodastream has been limping in 2014, with SODA stock off 28% for the year-to-date before Wednesday’s late announcement.
KO shares were up about 1% in after-hours trading.