Keurig Green Mountain to buy US soft drinks company Dr Pepper Snapple for $18.7bn

Drinks acquisition news : Keurig Green Mountain, a specialty coffee and coffeemaker company has struck a major deal to acquire US soft drinks company Dr Pepper Snapple Group for $18.7 billion.

Keurig Green Mountain acquisition of Dr Pepper Snapple Group

The merger deal will create an enlarged beverage company by the name Keurig Dr Pepper (KDP), which is estimated to have annual revenues of around $11 billion.

As per terms of the Keurig Green Mountain acquisition of Dr Pepper Snapple Group, shareholders of the US soft drink company will be paid $103.75 per share. Along with that, Dr Pepper Snapple Group will hold a stake of 13% in Keurig Dr Pepper while the shareholders of Keurig Green Mountain will hold the remaining stake of 87%.

Product range of US soft drinks company Dr Pepper Snapple Group. Photo courtesy of Dr Pepper Snapple Group.

Commenting on Keurig Green Mountain acquisition of Dr Pepper Snapple Group, Larry Young – President and CEO of Dr Pepper Snapple, said: “This transaction will deliver significant and immediate value to our shareholders, along with the opportunity to participate in the long-term upside potential of our combined company and attract new brands and beverage categories to our platform in a fast-changing industry landscape.

“We are excited to combine with Keurig to build on the rich heritage and expertise of both companies and provide the highest-quality hot and cold beverages to satisfy every consumer throughout the day.”

The Keurig Green Mountain Dr Pepper Snapple Group merger will bring together brands like Dr Pepper, 7UP, Snapple, Sunkist, A&W and Mott’s with coffee brand Green Mountain Coffee Roasters and the Keurig singleserve coffee system, along with over 75 owned, licensed and partner brands in the Keurig system.

Bob Gamgort – CEO of Keurig Green Mountain, commenting on Keurig Green Mountain acquisition of Dr Pepper Snapple Group, said: “Our view of the industry through the lens of consumer needs, versus traditional manufacturer-defined segments, unlocks the opportunity to combine hot and cold beverages and create a platform to increase exposure to high-growth formats.

“The combination of Dr Pepper Snapple and Keurig will create a new scale beverage company which addresses today’s consumer needs, with a powerful platform of consumer brands and an unparalleled distribution capability to reach virtually every consumer, everywhere.”

Keurig Green Mountain is owned by an investor group led by global investment firm JAB, which acquired it in March 2016. JAB and its partners, will make a combined equity investment of $9 billion in Keurig Dr Pepper as part of the financing of the Keurig Green Mountain acquisition of Dr Pepper Snapple Group.

Other investors in the new US beverage company Keurig Dr Pepper will be entities affiliated with merchant bank BDT Capital Partners and US confectionery manufacturer Mondelez International, which will have a stake of around 13-14%. Mondelez International, which is the owner of the Cadbury brand, is a partner of JAB in Keurig Green Mountain.

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