Keurig Dr Pepper is selling its minority stake in Chobani back to the yogurt maker as part of a $925 million deal that will allow the soda and coffee giant to pay down debt ahead of its upcoming split early next year.
The company said it will sell its minority position in Chobani for $800 million and will divest a manufacturing plant for $125 million.
Keurig Dr Pepper inherited a position in Chobani after it invested in a 33% stake in La Colombe in 2023. Chobani purchased the coffee brand a few months later for $900 million, and Keurig Dr Pepper rolled over its La Colombe equity into a stake in Chobani.
In a related transaction, Chobani will acquire Keurig Dr Pepper’s manufacturing facility and warehouse in Allentown, Pennsylvania, including the facility lease, equipment and operations. Chobani will continue to manufacture some products for Keurig Dr Pepper at the Allentown facility for a certain period after the sale under a co-manufacturing agreement.
"These transactions reflect the success of our partnership with Chobani and are designed to create value for both organizations," Tim Cofer, CEO at Keurig Dr Pepper, said in a statement. "Together, they enhance our financial flexibility, strengthen the efficiency of our manufacturing network and support the expansion of our important distribution partnership with Chobani.”
Keurig Dr Pepper said it intends to use the proceeds from the transactions to reduce debt as it prepares to split the company into two businesses, with one focusing on coffee and the other on beverages such as soda, energy drinks and tea.
Chobani and Keurig Dr Pepper will continue to be closely linked, with the companies announcing they will broaden their distribution agreement.
Keurig Dr Pepper will continue to distribute La Colombe's ready-to-drink lattes and other Chobani-owned beverage products through its direct store delivery network. The companies will also continue their long-term licensing, manufacturing and distribution agreement for La Colombe-branded K-Cup pods in the U.S. and Canada.
The transactions are expected to close in the third quarter.
