Dr Pepper Snapple Group, Inc., Plano, Texas, and Keurig Green Mountain, Inc., Burlington, Mass., entered into a definitive merger agreement to create Keurig Dr Pepper, a new beverage company with a portfolio of consumer brands and distribution capability to reach virtually every point-of-sale in North America.

This combination joins together Dr Pepper, 7UP, Snapple, A&W, Mott’s and Sunkist brands with coffee brand Green Mountain Coffee Roasters and the Keurig single-serve coffee system, as well as more than 75 owned, licensed and partner brands in the Keurig system.

“This transaction will deliver significant and immediate value to our shareholders, along with the opportunity to participate in the long-term upside potential of our combined company and attract new brands and beverage categories to our platform in a fast-changing industry landscape,” says Larry Young, president and CEO of Dr Pepper Snapple. “We are excited to combine with Keurig to build on the rich heritage and expertise of both companies and provide the highest-quality hot and cold beverages to satisfy every consumer throughout the day.”

“Our view of the industry through the lens of consumer needs vs. traditional manufacturer-defined segments unlocks the opportunity to combine hot and cold beverages and create a platform to increase exposure to high-growth formats,” adds Bob Gamgort, chief executive officer of Keurig. “The combination of Dr Pepper Snapple and Keurig will create a new scale beverage company, which addresses today’s consumer needs with a powerful platform of consumer brands and an unparalleled distribution capability to reach virtually every consumer everywhere. We are fortunate to have talented leadership teams within both companies, and I look forward to working together with the Dr Pepper Snapple team to make this combination a success for all of our stakeholders.”

“We are very excited about the prospect of KDP becoming a challenger in the beverage industry,” says Bart Becht, partner and chairman of JAB Holding Co. and chairman of Keurig. “Management’s proven operational and integration track record along with their commitment to innovation and potential future brand consolidation opportunities, while maintaining an investment-grade rating, positions the company well for long-term success and material shareholder value creation.”

Gamgort will serve as chief executive officer of the combined company and Ozan Dokmecioglu, current chief financial officer of Keurig, will serve as its chief financial officer. Dr Pepper Snapple president and CEO Larry Young intends to transition to a role on the board of directors to help the new management team realize the full potential of the company. Becht will serve as chairman of the company’s board of directors.

Keurig and Dr Pepper Snapple will continue to operate out of their current locations.