Keurig to Buy Dr Pepper for Over $21 Billion

Coffee has just met soda this week. Coffee giant Keurig Green Mountain has agreed to buy soda maker Dr Pepper Snapple Group Inc. in a deal worth over $21 billon. The company will be called “Keurig Dr Pepper.”

The owner of Keurig, JAB Holding Co. has made the Dr Pepper company its latest acquisition in a series of acquisitions it has been making in the last few years.

Keurig CEO Bob Gamgort stated to Reuters, ““We have a really wide portfolio of brands, we’re able to address almost every consumer need in every format and … to reach every point of sale. If you want to win in the beverage industry you need a portion of your portfolio that gives you significant scale and then you need to be able to layer in higher growth segments.”

As part of the deal, Keurig will pay a special dividend of $103.75 per share to Dr Pepper Snapple shareholders. In the end the cash payment will be $18.7 billion. These shareholders will have a 13% stake in the combined company.

Shares of Dr Pepper Snapple Group saw 25% in gains on Monday after Wall Street learned about the announcement.

Disclaimer: We have no position in Dr Pepper Snapple Group Inc. (NYSE: DPS) and have not been compensated for this article.