Dr Pepper Snapple Group Inc. and Keurig Green Mountain in January announced a merger agreement to create Keurig Dr Pepper (NYSE: KDP).
The combined beverage company began trading Tuesday on the New York Stock Exchange.
Why It's Important
The new company has a portfolio of consumer brands like Dr Pepper, 7 UP, Snapple, A&W, Mott's, Sunkist, Green Mountain Coffee Roasters and the Keurig single-serve coffee system. It has have pro forma combined 2017 annual revenues of approximately $11 billion.
"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," Larry Young, president and chief executive officer of Dr Pepper Snapple, said in a statement.
Keurig CEO Bob Gamgort said the combined company has a new scale that addresses consumer needs and "unparalleled distribution capability."
Keurig Dr Pepper expects to realize $600 million in synergies on an annual basis by 2021. The company will target debt/EBITDA of below three times within two to three years.
The stock closed Tuesday higher by more than 11 percent at $22.17.
Barclays: Combined Dr Pepper Snapple, Keurig Are Undervalued
Deutsche Bank's Beverages Analyst Talks Dr Pepper-Keurig Union
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