Keurig Dr Pepper is selling its stake in Chobani in a $925 million transaction that also includes the transfer of its Allentown, Pennsylvania, manufacturing facility to the yogurt group. The deal, announced on September 1st, complements the strengthening of the commercial collaboration between the two companies and will allow KDP to allocate resources to debt reduction while preparing to separate its coffee operations from its other beverages.
Chobani will repurchase Keurig Dr Pepper's entire minority stake for $800 million, while approximately $125 million will be allocated to the Allentown manufacturing complex and warehouse, through an agreement that includes the lease, equipment, and assets. The total proceeds shown are pre-tax, and the transactions are expected to close in the third quarter of 2026, subject to customary closing conditions.
For Chobani, the site will be the focus of an approximately $1,2 billion investment program over the next five years, aimed at producing milk with higher protein and lower sugar than conventional milk. The project expands the company's industrial prospects in the dairy sector, combining product development with a significant investment in production capacity.
On the employment front, Chobani intends to offer employment opportunities to the plant's production and warehouse workers, leveraging existing skills and promoting operational continuity. Employees involved in deliveries, customer service, and other corporate functions will remain with KDP, which will continue to receive some products manufactured in Allentown for a defined period after the sale, under a contract manufacturing agreement.
The exit from the shareholder structure will be accompanied by an expansion of the long-term distribution agreement: Keurig Dr Pepper will continue to carry La Colombe ready-to-drink lattes and other Chobani-owned beverages, including future innovations in the segment, in stores through its direct delivery network. The agreement for the licensing, manufacturing, and distribution of La Colombe K-Cup pods in the United States and Canada will also remain in effect.
The companies' collaboration dates back to 2023, when KDP began its relationship with La Colombe, which subsequently became part of Chobani. For Chobani founder and CEO Hamdi Ulukaya, the transaction will allow them to further leverage the plant's potential and reach more consumers through the partner's network, while also offering job prospects and new opportunities for Pennsylvania farmers.
Keurig Dr Pepper CEO Tim Cofer highlighted the increased financial flexibility, efficient production network, and expanded distribution collaboration as the key benefits of the agreement. The group will use the net proceeds to reduce debt in preparation for the formation of two future US-listed companies, Beverage Co. and Global Coffee Co.
The reorganization follows the acquisition of Dutch coffee and tea group JDE Peet's, completed in April for $18 billion. Meanwhile, demand for carbonated soft drinks and energy drinks supported KDP's second-quarter results, which beat analysts' expectations for sales and earnings, allowing the company to confirm its full-year forecast last month.
