Beverage bonanza: Dr Pepper Snapple merging with Keurig Green Mountain

It's a caffeine lover's dream: Dr Pepper Snapple is merging with Keurig.The new company will be called Keurig ...

Posted: Jan 29, 2018 5:42 PM
Updated: Jan 29, 2018 5:42 PM

It's a caffeine lover's dream: Dr Pepper Snapple is merging with Keurig.

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.

It's the latest big merger in the food and beverage industry. Companies are grappling with the likelihood that prices could be pushed lower as a result of the increased dominance of Walmart and Amazon in the supermarket business.

News of the deal sent shares of Dr Pepper Snapple surging more than 25% on Monday.

Dr Pepper also recently bought Bai Brands, which produces antioxidant drinks, for $1.7 billion. (You may remember last year's quirky Super Bowl ad for Bai featuring Justin Timberlake watching Christopher Walken recite lyrics to the NSYNC hit "Bye Bye Bye.")

Keurig Green Mountain and its investors will own 87% of the combined company. Keurig was bought by German conglomerate JAB Holding in 2015. JAB also owns the coffee chains Peet's, Stumptown and Caribou as well as Krispy Kreme and Panera.

Dr Pepper Snapple will own the remaining 13% of Keurig Dr Pepper. JAB will invest $9 billion in Dr Pepper Snapple. Dr Pepper Snapple stockholders will receive $103.75 in cash for each share they own.

The companies said the combined Keurig Dr Pepper would have had about $11 billion in revenue last year. To put that in perspective, analysts estimate Pepsi and Coke generated $63.4 billion and $35.2 billion in sales respectively last year.

Companies have been pairing up to cut costs and better position themselves for a tougher pricing world. The grocery business is increasingly dominated by Walmart and Amazon, especially after Amazon bought Whole Foods.

Related: JAB's Panera is buying back Au Bon Pain

Both Walmart and Amazon aim to keep prices low, which squeezes the profit margins of big food companies. One way to combat that is to get bigger.

Hershey agreed to buy Amplify Snack Brands, the maker of SkinnyPop popcorn, for $1.6 billion last month. Campbell Soup agreed to purchase the pretzel maker Snyder's-Lance for $4.9 billion in December.

But another food giant, Oreo and Cadbury owner Mondelez will be a big winner from the Dr Pepper Snapple deal.

Mondelez agreed to merge its coffee business with JAB's popular European coffee brands, such as Senseo and Douwe Egberts, in 2014 and subsequently acquired a stake in Keurig once JAB bought it a year later. As a result, Mondelez will have a 13% to 14% stake in the combined Keurig Dr Pepper.

And it looks like another well-known food and drink company, Dunkin' Brands, could be a loser as a result of the merger.

Shares of Dunkin' fell 2% in early trading Monday. Analysts speculated last year that JAB might want to buy Dunkin'. That deal seems less likely now.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 67649

Reported Deaths: 1912
CountyConfirmedDeaths
Hinds5613118
DeSoto365831
Harrison252036
Madison242266
Rankin228334
Jackson227642
Jones189958
Forrest180656
Washington166341
Lee146241
Lauderdale141292
Neshoba128692
Lamar122014
Oktibbeha112239
Bolivar111334
Warren109333
Lowndes107737
Panola105913
Sunflower103925
Scott100320
Lafayette97316
Copiah95428
Pike93636
Leflore93363
Holmes89248
Grenada84721
Yazoo83112
Pontotoc8278
Lincoln81741
Monroe79655
Simpson79630
Leake78825
Wayne76721
Coahoma76013
Tate73429
Marshall6959
Marion67720
Union63616
Adams62325
Winston62016
Covington61213
George5815
Pearl River55039
Newton54211
Tallahatchie53110
Attala52225
Walthall50220
Chickasaw46219
Noxubee45711
Alcorn4285
Calhoun4189
Tishomingo4175
Prentiss41210
Claiborne40713
Smith40513
Clay39614
Hancock39014
Jasper3869
Tippah36613
Itawamba35910
Tunica3377
Clarke32726
Montgomery3265
Lawrence3238
Yalobusha31510
Humphreys29311
Quitman2691
Carroll26111
Greene25012
Perry2367
Webster23412
Kemper23314
Amite2326
Jefferson Davis2316
Wilkinson21213
Stone1995
Sharkey1975
Jefferson1967
Benton1441
Choctaw1344
Franklin1272
Issaquena261
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 99390

Reported Deaths: 1733
CountyConfirmedDeaths
Jefferson13109243
Mobile9947207
Montgomery6835148
Madison537834
Tuscaloosa421373
Unassigned359961
Baldwin354425
Shelby328335
Marshall316736
Lee267845
Morgan239318
Etowah212131
DeKalb181913
Calhoun178414
Elmore172338
Walker152664
Houston139812
Russell13682
St. Clair133817
Limestone133313
Dallas132323
Franklin127420
Cullman122512
Colbert118113
Autauga116921
Lauderdale116719
Escambia108217
Talladega102614
Jackson9894
Tallapoosa85579
Chambers84138
Dale83424
Blount8004
Chilton7926
Butler76436
Coffee7616
Covington73520
Pike7097
Clarke6629
Barbour5755
Marion57424
Lowndes57224
Marengo55215
Hale47626
Bullock46411
Winston45311
Perry4424
Bibb4385
Wilcox42910
Monroe4214
Randolph40110
Pickens4009
Conecuh39310
Washington39112
Sumter36018
Lawrence3491
Macon33514
Crenshaw3185
Choctaw28312
Cherokee2737
Henry2633
Geneva2611
Clay2585
Greene25111
Lamar2222
Fayette2075
Cleburne1271
Coosa1012
Out of AL00
Tupelo
83° wxIcon
Hi: 98° Lo: 75°
Feels Like: 89°
Columbus
Clear
77° wxIcon
Hi: 96° Lo: 74°
Feels Like: 78°
Oxford
Clear
75° wxIcon
Hi: 94° Lo: 73°
Feels Like: 75°
Starkville
Clear
77° wxIcon
Hi: 94° Lo: 71°
Feels Like: 78°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather