Keurig buys Dr Pepper, Snapple, 7 Up and more, becoming US$11 billion drink giant
Dr Pepper Snapple shareholders will receive US$103.75 (HK$811.07) per share in a special cash dividend and keep 13 per cent of the combined company.
Keurig will buy Dr Pepper Snapple Group, creating a drink giant with about US$11 billion (HK$86 billion) in annual sales, it has announced.
The companies, both the result of previous mergers, will bring under one tent global brands like Dr Pepper, 7 Up, Snapple, A&W, Mott’s, Sunkist and Keurig’s single-serve coffee makers.
The company is still vastly outsize by PepsiCo Inc. and Coca-Cola Co., which had sales in 2016 of US$63 billion (HK$492 billion) and US$41 billion (HK$320 billion), respectively.
Keurig Green Mountain Inc., which is a privately held company, said Monday that Dr Pepper Snapple shareholders will receive US$103.75 (HK$811.07) per share in a special cash dividend and keep 13 per cent of the combined company.
Shares of Dr Pepper Snapple soared more than 39 per cent before the opening bell.
Keurig CEO Bob Gamgort will lead the new company, called Keurig Dr Pepper. Larry Young, CEO at Dr Pepper Snapple, will become a director.
Keurig and Dr Pepper Snapple will continue to run out of their current locations. Keurig is based in Waterbury, Vermont and Dr Pepper Snapple has headquarters in Plano, Texas.
Keurig was acquired by Europe’s JAB Holding company in 2016 in partnership with the snackmaker, Mondelez International.
JAB will be the controlling shareholder, and Mondelez will hold a stake of about 13 per cent to 14 per cent.
The deal is expected to close in the second quarter, with the company estimating total debt to be about US$16.6 billion (HK$129.77) at that time.
The acquisition must still be approved by shareholders of Dr Pepper Snapple Group Inc.