Dr Pepper Snapple is rising after announcing a merger with Keurig Green Mountain

Shares of Dr. Pepper Snapple are rising after the company announced it would be merging with Keurig Green Mountain, the maker of the popular Keurig coffee brewers.

Dr. Pepper Snapple is up 24.59% to $US119.17 after the announcement.

Keurig Green Mountain will buy Dr. Pepper Snapple for $US103.75 a share in a special cash dividend. The combined company will be called Keurig Dr. Pepper and will be controlled by Keurig’s parent company JAB Holding Company.

Shares were up as much as 41% after the news, but have since settled to be about 23% higher.

The combined company is expected to bring in $US11 billion in annual revenue, at a time where both brands are facing declining sales. Dr. Pepper Snapple is coming to terms with American’s changing habits and sinking demand for sugary sodas, as Keurig Green Mountain faces stiff coffee competition and environmental concerns from its plastic, single-use pods.

Dr. Pepper Snapple was about flat for the year before the announcement and is now up 24.6%.

Read more about the merger here.

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