Keurig Green Mountain, Dr Pepper Snapple merging in $18B deal

Jan. 29 (UPI) -- Keurig Green Mountain announced on Monday it would buy Dr Pepper Snapple in an $18.7 billion deal to create a new beverage giant.

In a press release, Keurig said Dr Pepper Snapple's shareholders would receive $103.75 per share in a special cash dividend and retain 13 percent of the combined company.

The merger will put beverage brands like Dr Pepper, 7UP, Snapple, A&W, Mott's and Sunkist under the same company as Green Mountain Coffee -- Keurig's single-serve coffee system and more than 75 owned, licensed and "partner brands" in the company's universe, including Donut House and Tully's Coffee.

Larry Young, the President and CEO of Dr Pepper Snapple, said the merger would bring "significant and immediate value" to shareholders and would help build on the "rich heritage and expertise of both companies."

"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 CEO Bob Gamgort added.

"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."

Gamgort will serve as CEO of the combined company and Ozan Dokmecioglu, the current chief financial officer of Keurig, will serve as its chief financial officer. Young will transition to a role on the company's board of directors.

After the announcement, Dr Pepper Snapple stock surged, with shares up more than 42 percent at one point.