Courtesy of Keurig Dr Pepper.
Keurig Dr Pepper launched a proposed $2 billion stock offering Thursday, seeking money to pay down debt before it divides its beverage and coffee businesses into separate public companies.
The company said in its announcement that it intends to use the net proceeds to repay or buy back approximately $2 billion of outstanding debt. The planned separation into Beverage Co. and Global Coffee Co. remains targeted for early 2027.
Selling new shares would bring in cash without adding another loan, but would also dilute existing shareholders’ percentage ownership unless they buy additional shares. The offering has not been priced or completed and remains subject to market and other conditions.
Underwriters would have a 30-day option to buy up to another $300 million of shares. Goldman Sachs and Morgan Stanley are the joint book-running managers.
The company says reducing debt should give both future businesses more room to invest. Keurig Dr Pepper’s brands include Dr Pepper, Canada Dry, Snapple and the Keurig coffee system.
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