Apartment REIT UDR is up 2.1% after hours as it's headed into the S&P 500 from a previous spot on the MidCap 400.
The firm will replace Keurig Green Mountain (NASDAQ:GMCR) after the close tomorrow, following Keurig's successful acquisition by JAB Holding. Meanwhile, SmallCap 600 constituent Healthcare Realty Trust (HR +0.8%) takes UDR's spot in the MidCap 400.
Moving down the chain, Proto Labs (PRLB +0.7%) will replace Healthcare Realty Trust in the SmallCap 600. It's up 4.3% after hours.
JAB Holding completes its acquisition of Keurig Green Mountain (NASDAQ:GMCR).
The transaction brings Keurig under the same corporate umbrella as Caribou Coffee, Peet's Coffee & Tea, Jacobs Douwe Egberts, Bach Espresso, Bravo, Einstein Noah Restaurant Group, and Espresso House.
By swallowing up Keurig, JAB has raised the stakes in its battle with Starbucks (NASDAQ:SBUX), Mondelez International (NASDAQ:MDLZ), Nestle (OTCPK:NSRGY), and JM Smucker (NYSE:SJM) for coffee dominance. For now, Starbucks plans to stick with its Keurig partnership, although on the last SBUX earnings call Howard Schultz called the future of the relationship unresolved (earnings call transcript). The other companies will also have to shift strategy to the new coffee matrix.
JAB is a privately-owned company with power divided up between the children of Albert Reimann.
Susquehanna notes that a strong U.S. dollar is likely to force 2016 EPS estimates lower on major global food and beverage names.
The blended drop vs. the U.S. dollar of the Euro, Canadian Dollar, UK Pound, Mexican Peso, and Brazilian Real is -10%, analyst Pablo Zuniac. Other firms are likely to have factored in a less disruptive F/X market with their 2016 estimates.
Coffee prices continue to fall as strong El Nino rains in Brazil help to boost crop yields. The next harvest in the nation is forecast to be up 20% Y/Y at 58M bags.
Even with Arabica prices down 28% this year, analysts see another swing lower for coffee in 2016 due to the oversupply situation.
Weak currencies in South America are also providing a strong incentive to local producers to sell as much as they can.
The trend toward low coffee prices is helping to lift margins for many coffee sellers with U.S. retail prices only down 4% to 5% this year. Companies light on hedging positions are seeing the biggest benefit.
Most execs play coy over the bottom line benefit of lower coffee commodity prices, but even Starbucks CFO Scott Maw had to concede that pricing looked a "little bit favorable" during the firm's last earnings call (transcript).
Added to the Nasdaq 100 (NASDAQ:QQQ), effective Dec. 21 will be: Ctrip (NASDAQ:CTRP), Endo International (NASDAQ:ENDP), Expedia (NASDAQ:EXPE), Maxim Integrated (NASDAQ:MXIM), Norwegian Cruise Lines (NASDAQ:NCLH), T-Mobile (NASDAQ:TMUS), and Ulta Salon (NASDAQ:ULTA).
To be removed: C.H. Robinson (NASDAQ:CHRW), Expeditors International (NASDAQ:EXPD), Keurig Green Mountain (NASDAQ:GMCR), Garmin (NASDAQ:GRMN), Staples (NASDAQ:SPLS), VimpelCom (NASDAQ:VIP), and Wynn Resorts (NASDAQ:WYNN). Also to be removed: LiLAC Class A Shares (NASDAQ:LILA), and LiLAC Class C Shares (NASDAQ:LILAK).
The buyout of Keurig Green Mountain (NASDAQ:GMCR) is creating a buzz in the beverage sector.
Shares of GMCR are up 74% to $89.91 vs. the deal price of $92. The moonshot in share price is a positive for Coca-Cola (KO +0.2%) which owns a 17% block and not so great for Greenlight Capital which went short (for the second time) when shares were in the triple-digits.
SodaStream (SODA +9.8%) and Coffee Holding (JVA +11.9%) are both up sharply with the M&A in the sector raising their profile.
Coffee names Farmer Brothers (FARM +0.9%) and TreeHouse Foods (THS +0.8%) are also ahead of broad market averages. National Beverage Corp. (FIZZ +1.4%) is catching some bids as it Coca-Cola distributor Embotalledora (AKO.A, AKO.B) with a +1.2% gain.
An interesting side note on the deal is if it could impact ongoing speculation over a Mondelez International (MDLZ -0.6%) and PepsiCo (PEP +0.1%) food combination. Mondelez is a coffee JV partner of JAB Holdings which is now a bit closer to Coca-Cola through the GMCR deal.
Keurig Green Mountain (NASDAQ:GMCR) announces it will be acquired by privately-owned JAB Holding Company for $92 per share in a deal valued at $13.9B. JAB Holding is an experienced collector of large consumer product brands.
GMCR stakeholder Coca-Cola (NYSE:KO) says it backs the buyout and indicates it will work with JAB to stay on as a major Keurig single-serve partner.
The deal is expected to close in the first quarter of 2016.
GMCR closed at $51.70 on Friday. Shares are currently on a trading halt, but will soon skyrocket.