Dr Pepper joins mega drinks merger

Dr Pepper2Keurig has announced its acquisition of Dr Pepper Snapple Group Inc, creating a beverage giant with about $US11 billion ($A15 billion) in annual sales.

According to AAP, the beverage companies will bring under one tent global brands including Dr Pepper, 7UP, Snapple, A&W, Mott’s, Sunkist and Keurig’s single-serve coffee makers.

Keurig Green Mountain Inc said on Monday that Dr Pepper Snapple shareholders will receive $US103.75 per share in a special cash dividend and keep 13 per cent of the combined company. Shares of Dr Pepper Snapple soared more than 36 per cent before the opening bell on Monday.

Keurig chief executive Bob Gamgort will lead the new company, called Keurig Dr Pepper. The deal is expected to close in the second quarter. It still needs approval from Dr Pepper Snapple shareholders.

“So what’s behind this? With Keurig’s acquisition of DPSG, the company now extend their reach across consumer beverage occasions: from the kitchen counter coffee machine, to the cafe or coffee shop and now into the American supermarket beverage aisle, adding Dr Pepper soda, Mott’s juice, Snapple RTD Tea, and DPSG’s high growth Bai drinks – as well as potentially US ‘allied’ brands including High Brew coffee and Body Armor sports drinks,” said Howard Telford, head of Soft Drinks Research at Euromonitor International.

“The acquisition immediately intensifies competition in two of the most fertile growth areas of US beverages: foodservice consumption and premium, retail brewed beverages (meaning bottled coffee and tea).”

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