JAB makes €17bn bet on soft drinks
Germany's JAB Holding's US coffee business Keurig Green Mountain is to buy soft drinker maker Dr Pepper Snapple Group in a deal worth more than $21bn (€17bn).
The deal adds brands such as 7UP, Snapple and Sunkist under one roof with the world's biggest maker of single-serve coffee.
The deal marks JAB's latest push in the US, after buying Keurig owner Green Mountain Coffee Roasters in 2016 and Mondelez's international coffee business earlier.
JAB said it would make an equity investment of $9bn to finance the transaction for which the companies did not give an overall value. Including an $18.7bn cash payout to Dr Pepper Snapple shareholders, Thomson Reuters calculations put the value of the deal in excess of $21bns.
Dr Pepper Snapple shareholders will receive $103.75 per share as a special cash dividend and own 13pc of the combined company, which will be called 'Keurig Dr Pepper', the companies said.
Shares of Dr Pepper jumped nearly 37pc in premarket trading to $131 on Monday and were set to open at a record high.
Keurig CEO Bob Gamgort will head the combined company, while its chief financial officer Ozan Dokmecioglu will be the chief financial officer. The new company expects total net debt at closing, foreseen in the second quarter of 2018, to be about $16.6bn.
Cadbury maker Mondelez said that as part of the deal, it would exchange its stake in Keurig for an equity interest in the new company. (Reuters)