Dr. Pepper Snapple Group Inc. and Keurig Green Mountain announced plans to merge on Monday, creating Keurig Dr. Pepper. Dr. Pepper Snapper shareholders will receive $103.75 per share as a special cash dividend and hold on to 13% of the newly-merged company. Keurig shareholders will hold the other 87%. Dr. Pepper Snapple shares shot up 39% in premarket trading after the announcement. The combined company will have pro forma revenue of about $11 billion. Keurig Dr. Pepper brands will include the namesake Dr. Pepper beverage, 7Up, Sunkist and Green Mountain Coffee Roasters, which includes the Keurig’s single-serve coffee business. Global investment firm JAB Holding Company will make a $9 billion equity investment as a part of the transaction financing, and will be the controlling shareholder when the transaction closes. Mondelez International Inc. , JAB’s partner in Keurig, will have about a 13% to 14% stake in the merged company. Mondelez shares are up 0.7% in premarket trading. Keurig Dr. Pepper will target $600 million in synergies on an annualized basis by 2021. Keurig went private in 2016. Dr. Pepper Snapple shares are up 6.2% for the past year, while the S&P 500 index is up 25.2% for the period.
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