The maker of Keurig coffee machines is acquiring Dr. Pepper Snapple Group, creating a beverage giant with about $11 billion in annual sales.
The investment firm’s Keurig Green Mountain Inc. business, known for its single-serve coffee brewers, agreed on Monday to take control of Dr Pepper Snapple Group Inc. The deal will pay $18.7 billion in cash to shareholders and assemble a massive beverage distribution network in the U.S.
The new company will be called Keurig Dr Pepper. It will combine Dr Pepper, 7UP, Snapple, A&W and Sunkist with Keurig's franchise of single-serve coffee pods, which includes the Green Mountain Coffee Roasters and The Original Donut Shop brands.
The acquisition gives Keurig a way to get its bottled coffee drinks into coolers at convenience stores, drugstores and other retailers at a time when ready-to-drink coffee sales are growing rapidly.
It also would ramp up its competition with Starbucks Corp., whose bottled drinks dominate the market and are distributed by PepsiCo Inc.
Read more about the deal here.