Plano, TX and Burlington, MA- Keurig Green Mountain announced plans Monday morning to buy Dr Pepper Snapple in a deal that creates a new beverage giant with $11 billion in sales, according to acompany press release.

Dr Pepper Snapple shareholders will receive $103.75 per share in a special cash dividend and retain 13% of the combined company.

Keurig Dr Pepper (KDP), as the new company will be called, combines two iconic beverage companies, Dr Pepper's 7UP, Snapple, A&W, Mott’s, Sunkist and the antioxidant-inflused Bai Brands with leading coffee brand Green Mountain Coffee Roasters and its Keurig single-serve coffee system, as well as more than 75 owned, licensed and partner brands in the Keurig system.

“The Keurig Dr. Pepper deal is a perfect example of CPG companies taking bold and decisive corporate action to better position themselves for rapidly evolving consumer preferences and needs," said William S.J. Hood, managing director of William Hood & Co., a New York-based investment bank and advisor. "Keurig gains a significantly broader distribution network and three iconic consumer brands.  Dr. Pepper gains the potential know-how and experience to reach the consumer directly at home with a more convenient format.”

Keurig CEO Bob Gamgort will serve as CEO of the combined company, and remain in Burlington. “Our view of the industry through the lens of consumer needs, versus traditional manufacturer-defined segments, unlocks the opportunity to combine hot and cold beverages and create a platform to increase exposure to high-growth formats," he said. "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.”

Since becoming a private company following its acquisition by a JAB-led investor group in March 2016, Keurig has renewed its marketing investment and improved its new brewer innovation pipeline, which has resulted in renewed top-line volume growth, increasing U.S. household penetration for Keurig brewers to 20%, from 17%, in the last two years. In the same period, Keurig has added key brand partners into the Keurig system with the help of strategic pod price reductions and value-added services. The combination of those two factors has allowed the company to improve its pod growth from the low-single digits to mid-single digits in the second half of calendar year 2017, according to a statement.

Ozan Dokmecioglu, current CFO of Keurig, will serve as the new entity's chief financial officer. Dr Pepper Snapple President and CEO Larry Young intends to transition to a role on KDP’s Board of Directors to help the new management team realize the full potential of the company.

The merger, said Young, in a statement, "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. 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.”

Bart Becht, partner and chairman of JAB Holding Company and chairman of Keurig, said, “We are very excited about the prospect of KDP becoming a challenger in the beverage industry. 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.”

According toBloomberg, JAB has transformed the fast-food and drink industries with a series of acquisitions that grew from a 2013 deal for the owner of Douwe Egberts coffee. That business was combined with Mondelez International Inc.’s Jacobs coffee in 2015.

Mondelez -- the maker of Oreo cookies and Triscuit crackers -- is an investor in Keurig as a result of the 2015 deal and will hold about 13% to 14% of Keurig Dr Pepper.