Keurig adds soft drinks to beverage collection
Coffee company to merge with Dr Pepper Snapple
For soft drink fanatics who also need a coffee fix in the mornings, a big deal announced Monday will cover all their beverage needs.
Dr Pepper Snapple Group is merging with Keurig Green Mountain to create a beverage giant with an estimated
$11 billion in annual revenues, the companies said.
The deal brings together some of the soft drink and juice world’s best known names — Dr Pepper, 7UP, Snapple, A&W, Mott’s, Sunkist and Hawaiian Punch — with Green Mountain Coffee Roasters, Keurig’s single-serve coffee systems, and more than 75 other brands connected to the Keurig system, including Original Donut Shop Coffee. The combined company will be called Keurig Dr Pepper.
“KDP will be a total beverage solution that provides options across all consumer needs and occasions, whether they are at work, at play or on the go,” said Dr Pepper Snapple CEO Larry Young, who plans to stay on during the transition and will serve on the new company’s board of directors. “The combined organization will unlock opportunities for growth across the entire beverage space.”
Transaction terms call for Dr Pepper Snapple shareholders to receive a cumulative cash payment of roughly
$18.7 billion, based on the company shares reported outstanding in late October.
Keurig Green Mountain is owned by an investment group led by JAB Holding, a Luxembourg-headquartered, privately-held company.
Terms of the new deal call for Dr Pepper Snapple shareholders to receive a $103.75 per share special cash dividend, representing a roughly 8.5% premium over the shares’ $95.65 closing price Friday. They also will retain
13% of the combined company. JAB Holding will become the controlling shareholder of the new entity, with JAB, its partners and its management owning 87% of the shares. JAB acquired Keurig Green Mountain in
2016. The new company will be traded on the New York Stock Exchange.
“Having an element of the company that’s public while still having an anchored shareholder with (an) incredibly long-term view I think is the optimal combination in today’s environment,” Robert Gamgort, Keurig Green Mountain CEO, said during a Monday conference call with investors and financial analysts.
Gamgort will head the new corporate entity, joined by Ozan Dokmecioglu, the coffee company’s current chief financial officer. JAB also controls coffee brands Peet’s and Caribou.