Keurig Green Mountain and Dr Pepper Snapple Group are merging to create what company officials are calling a new beverage company that will have a broad portfolio of brands in the hot and cold beverage segments.
Under the terms of the agreement, which has been unanimously approved by the Dr Pepper Snapple board of directors, Dr Pepper Snapple shareholders will receive $103.75 per share in a special cash dividend and retain 13% of the combined company.
The new company will be known as Keurig Dr Pepper (KDP) and have combined revenues of $11 billion, company officials said. In addition, KDP will also have a broad roster of beverage brands including Dr Pepper, 7UP, Snapple, A&W, Mott’s, Sunkist along with its assortment of Green Mountain Coffee Roasters coffee and the line of Keurig coffeemakers.
“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,” said Bob Gamgort, Keurig’s CEO. “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.”
Gamgort will serve as CEO of the combined company and Ozan Dokmecioglu, current chief financial officer of Keurig, will serve as its chief financial officer. Dr Pepper Snapple president/CEO Larry Young intends to transition to a role on KDP’s board of directors to help the new management team realize the full potential of the company.
Bart Becht, partner and chairman of JAB Holding Company, the parent company of Keurig, will serve as chairman of the company’s board of directors and Bob Gamgort will become an executive member of the board.
Keurig and Dr Pepper Snapple will continue to operate out of their current locations and Gamgort, CEO of the combined company, will be based in Burlington, MA. The combined company will draw on the leadership teams of both companies, who will continue running their respective businesses, officials said.