LUXEMBOURG CITY, LUXEMBOURG — JAB Holding Co. through its Keurig Green Mountain business unit has entered into an agreement to acquire the Dr Pepper Snapple Group, Plano, Texas. Once the transaction is completed, Dr Pepper Snapple Group and Keurig Green Mountain will merge to form Keurig Dr Pepper. The new business will have annual revenues of approximately $11 billion.
Under the terms of the merger agreement, Dr Pepper Snapple shareholders will receive a special cash dividend of $103.75 per share and will retain their shares in Dr Pepper Snapple. Upon closing of the transaction, Keurig shareholders will hold 87% and Dr Pepper Snapple shareholders will hold 13% of the combined company. JAB Holding Co. will make an investment of $9 billion as part of the financing of the transaction.
The combined companies will feature such brands as Dr Pepper, 7UP, Snapple, A&W, Mott’s and Sunkist with leading coffee brand Green Mountain Coffee Roasters and the Keurig single-serve coffee system, as well as more than 75 owned, licensed and partner brands in the Keurig system.
|Bart Becht, partner and chairman of JAB Holding Co. and chairman of Keurig Green Mountain|
“We are very excited about the prospect of KDP becoming a challenger in the beverage industry,” said Bart Becht, partner and chairman of JAB Holding Co. and chairman of Keurig Green Mountain. “Management’s proven operational and integration track record along with their commitment to innovation and potential future brand consolidation opportunities, while maintaining an investment grade rating, positions the company well for long-term success and material shareholder value creation.”
JAB Holding sees the merger of the two companies creating a complementary portfolio with access to high-growth segments of the beverage industry. JAB management anticipates the merger will generate approximately $600 million in synergies by 2021.
|Larry Young, president and c.e.o. of Dr Pepper Snapple|
“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,” said Larry Young, president and chief executive officer of Dr Pepper Snapple. “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.”
Bob Gamgort, the c.e.o. of Keurig Green Mountain, sees the combined scale of the two companies giving Keurig Dr Pepper significant distribution capability to reach consumers.
|Bob Gamgort, c.e.o. of Keurig Green Mountain|
“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,” he said. “We are fortunate to have talented leadership teams within both companies, and I look forward to working together with the Dr Pepper Snapple team to make this combination a success for all of our stakeholders.”
Mr. Gamgort will serve as the c.e.o. of Keurig Dr Pepper. Ozan Dokmecioglu, current chief financial officer of Keurig, will serve as its c.f.o. Larry Young will transition to a role on Keurig Dr Pepper’s board of directors.The two companies will continue to operate out of their current locations in Burlington, Mass., and Plano.