30 January 2018 | US

Keurig-Dr Pepper merger to forge new US beverage giant

$18.7bn deal will be further boost standing of acquisitions giant, JAB Holdings, in the US drinks market
JAB Holdings has announced plans to acquire Dr Pepper Snapple and merge it with its Keurig Green Mountain business. The move will give the single-serve coffee company access to Dr Pepper’s drinks distribution network in the US, in addition to a host of brands including Fiji Water, Vita Coco, Sunkist and A&W root beer.

Access to Dr Pepper’s supply chains will further propel JAB’s beverage interests in the US, which have expanded significantly in recent years. The German giant’s latest acquisition has prompted some analysts to speculate that it could soon move to challenge Pepsico and Coca-Cola for dominance in their own back yard.

Expected to generate $11bn in revenue, the new coffee and soft drinks company, named Keurig Dr Pepper, would still be some way behind the market leaders.

Soft drinks behemoths Pepsico and Coca-Cola reported sales of $63bn and $41bn respectively in 2016.

JAB’s tenacious expansion will, however, give competitors food for thought, with the new acquisition poised to cement its already sure-footing in the US beverage market. Speaking to the press, Keurig Chief Executive Officer Bob Gamgort, appeared to reflect this sentiment: “Combined, our nationwide distribution system will be unrivalled”, he said.

JAB Holdings has built a formidable food and beverage empire in recent years that counts major brands, including Douwe Egberts, Panera Bread Co, Peet’s Coffee & Tea, Stumptown Coffee Roasters, Espresso House, Au Bon Pain and Oreo cookie maker, Mondelez, among its ranks.

JAB has said that its Keurig business will remain publicly traded under its new name, with Gamgort remaining at the helm of the new firm.
 
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