Keurig bought for $13.9 billion by firm that owns Peet's Coffee

Keurig, maker of single cup coffee machines, is being sold to private equity firm JAB Holding Co.

Keurig Green Mountain, a maker of single-serve coffee brewers, announced Monday it had agreed to be acquired for $13.9 billion in cash by a billionaire European family, which has been trying to consolidate and dominate the global market for coffee.

However, JAB sees much value in Keurig and offered $92 per share, which as of the close of business last Friday represented a premium of over 78%.

Coca-Cola, Keurig's biggest single shareholder with a 17.4 percent stake, is backing the deal. JAB also owns controlling stakes in Peet's Coffee & Tea, Jacobs Douwe Egberts, Caribou Coffee, Espresso House, Einstein Noah Restaurant Group and Baresso Coffee.

BofA Merrill Lynch and Credit Suisse provided fairness opinions to Keurig.

Shares of Keurig skyrocketed 74% in premarket trading on Monday. Buying Keurig may get JAB Holding closer to coffee market leader Nestle, they said.

Investors had soured on Keurig after the company reported declining sales growth and a disappointing outlook for next year.

The deal values Keurig's Green Mountain coffee at $92 dollars per share.

If I said it once I said it a hundred times, give or take a dozen, a fool and his money are easily parted and I find it highly unlikely that JAB will ever be able to exhibit a return on investment from acquiring Keurig Green Mountain. It might complicate what has been a tight relationship: for a long time Starbucks was the exclusive high-end coffee brand for Keurig's coffee pods.

Upon closing, Keurig will become a privately owned company operating independently under JAB's global coffee platform.

On May 13, 2014, Keurig disclosed that Coke increased its stake by 2,805,591 shares.

Through the year ended September 26, Keurig's sales fell 4% to $4.52 billion, while its profits tumbled 16% to $498 million. What's more, the new cold brewer is rolling out more slowly than expected.

Along JAB, minority investors in the Keurig deal, which is expected to close in the first quarter of next year, include Mondelez International and entities affiliated with BDT Capital Partners.

Three senior partners run JAB, and its ambitions in coffee may be modeled partly upon the global strength of acquisitive brewer Anheuser-Busch InBev, where JAB senior partner Olivier Goudet serves as chairman and JAB senior partner Peter Harf was formerly chairman.

JAB's goal is to be the Budweiser of coffee, Pablo Zuanic, an analyst at Susquehanna International Group, said on Monday.