Keurig Green Mountain Inc. has agreed to an $18.7 billion deal to acquire of Dr Pepper Snapple Group Inc. Through the merger Keurig will now have control of brands like 7Up, Sunkist, Crush, Hawaiian Punch, Canada Dry, Schweppes, Mott’s, RC, Yoo-hoo, Clamato, Realime, Rose’s, Mr. & Mrs. T, bai, Hires Root Beer, Nantucket Nectars, Orangina, Sun Drop, Stewart’s and IBC Root Beer.
The coffee pod’s parent company, global investment firm JAB Holding Co., already owns several beverage and restaurant brands including Caribou Coffee, Au Bon Pain, and Panera Bread. According to Bloomberg, the deal catapults JAB into the big leagues with Coca-Cola Co. and PepsiCo Inc.
“It’s a deal that makes a lot of strategic sense,” he said. “Once it gets going and they can deliver on some of the bold things they’re talking about here, this will be a really important benchmark that investors will use to compare Coke and Pepsi against,” said Bloomberg intelligence analyst Ken Shea.
Since announcing the deal Dr Pepper’s stock has climbed as much as 32 percent. Per the merger “Dr Pepper Snapple Group” will be renamed “Keurig Dr Pepper.” The acquisition will also build a stronger distribution network for JAB products and Dr Pepper brand products.
“Combined, our nationwide distribution system will be unrivaled,” Keurig chief executive officer Bob Gamgort said on a call with analysts, according to Bloomberg. Keurig has relationships with Amazon and Best Buy Co. where Dr Pepper does not and Dr Pepper Snapple has ties to convenience stores and beverage vendors where Keurig does not. The merger will assist in filling in the gaps.
This deal cements the backers of JAB, the Reimann family, as some of America’s most 50 powerful people in food.