6 ms·
Keurig to Acquire Dr Pepper Snapple in Largest Soft-Drink Deal Ever
- Viper007Bond 9y agoIsn't Dr. Pepper currently distributed through Pepsi? I wonder how this will affect that.
- stickydink 9y agoIn the US, yes. In many other parts of the world it can come to you through Coca Cola.
- threeio 9y agoIts split in the US between Coke and Pepsi https://en.wikipedia.org/wiki/Dr_Pepper#Distribution https://en.wikipedia.org/wiki/Dr_Pepper#Distribution
- dragonwriter 9y agoThe bottling by Coca-Cola and Pepsi is mostly a legacy of the time when both of those were bottled by independent but contracted bottlers who sometimes also bottled Dr. Pepper, and has decreased since those companies have largely bought out their bottlers. That will probably continue to decrease, but yet another merger of the corporate parent not directly related to the production chain probably won't significantly accelerate or decelerate it.
- gamedna 9y agoLooking forward to single-serve barcoded doctor pepper keurig cups.
- n0us 9y agonothing better than a nice hot cup of doctor pepper to get me going in the morning
- cag_ii 9y agoFrom the wikipedia page (https://en.wikipedia.org/wiki/Dr_Pepper#Marketing https://en.wikipedia.org/wiki/Dr_Pepper#Marketing): In the early 1960s, Dr Pepper promoted the idea of serving the drink hot with lemon slices in winter. This idea appeared in the film Blast from the Past initially set in the early 1960s.
- barrkel 9y agoMany dilution-based drinks are quite good made with hot water - don't knock it before you've tried it.
- spodek 9y agoAnd more garbage from all their packaging to fill the ocean gyres and to pay third-world nations to fill their landfills with.
- anfilt 9y agoLeave Dr. Pepper alone. How about go bankrupt Keurig trying to DRM irl objects!
- gerdesj 9y ago"The company would have $11 billion in annual revenue, the companies said. It also would have about $16.6 billion in debt. Wells Fargo analyst Bonnie Herzog estimates the combined company would be valued at about $33 billion." Could someone please explain how on earth that adds up. I'll accept that when corp. valuations involve 10^9, then the usual rules of value might get a bit weird. Perhaps assets include a state or a slack handful of counties.
- adw 9y agoLooks like a comparable revenue multiple to Mondelez (MDLZ), the demerged snacks business which emerged from Kraft post Cadbury Schweppes takeover. So this looks completely unremarkable. Interest rates are very very low, so the debt doesn't seem like an enormous deal.
- Avshalom 9y agoPresumably debt shrinks while revenue grows so as long as debt is within an order of magnitude or so of revenue it isn't really held against it.
- notatoad 9y agoit's a ~4.5x multiple on revenue, minus debt. doesn't seem too outrageous to me? edit: it's also almost $2bn less than the sum of the two individual companies market caps. (13.7bn for keurig, 21.1bn for dr pepper snapple)
- riphay 9y agoWhen one company buys another it has to assume it's debt. Enterprise value = equity + debt - cash on hand (and other adjustments sometimes) So if a company has financed its growth with debt, you still have to pay for that if you're acquiring them so it adds to the valuation.
- nerfhammer 9y ago-$16.6 billion in debt is a scalar and +$11 billion in annual revenue is a rate. But is all that revenue profitable? It doesn't mention it in the article, but Dr. Pepper reports profit of about $1 billion per quarter and does not appear to be in any state of distress: https://finance.yahoo.com/quote/DPS/ https://finance.yahoo.com/quote/DPS/
- kken 9y agoInteresting change of perspective. News article from the US (Texas): https://www.texasmonthly.com/the-culture/dr-pepper-keurig/ https://www.texasmonthly.com/the-culture/dr-pepper-keurig/ "The Yanks Have Bought Dr Pepper" News article from Germany: http://www.handelsblatt.com/unternehmen/handel-konsumgueter/getraenke-milliardendeal-reimann-holding-kauft-dr-pepper/20903366.html http://www.handelsblatt.com/unternehmen/handel-konsumgueter/... "German billionaire family Reimann buys Dr. Pepper" I guess both are true, since Keurig is still a US run company, although its majority is owned by JAB holding.
- perl4ever 9y agoI wonder what the "artificial flavor" is in non-diet Dr. Pepper. It may be that it's a part of the formula that's always been there, but I was wondering if perhaps it is sucralose that is replacing some of the sugar in order to cut costs and calories.
- jorams 9y agoBeing from Europe, this article was rather confusing to read, because it named a number of soda brands that I was sure belonged to The Coca-Cola Company and PepsiCo. So I looked Dr Pepper Snapple up on Wikipedia: - The rights to Dr Pepper are owned by them in the U.S., but by The Coca-Cola Company mostly everywhere else. - The rights to 7 Up (or 7up) are owned by them in the U.S., but by PepsiCo everywhere else. - The only brand I see on their Wikipedia page that I know and that they also own in Europe appears to be Schweppes.