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Dr Pepper Snapple Group Agrees To license Certain Brands To PepsiCo

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Dr Pepper Snapple Group, or DPS, has agreed to license certain brands to PepsiCo, on completion of PepsiCo’s proposed acquisitions of The Pepsi Bottling Group, and PepsiAmericas.

As part of the transaction, DPS will receive a one-time upfront payment of $900 million, before taxes and other related fees and expenses.

Under a new licensing agreement that will replace existing agreements with The Pepsi Bottling Group (PBG) and PepsiAmericas (PAS), PepsiCo will distribute Dr Pepper, Crush and Schweppes in the US; Dr Pepper, Crush, Schweppes, Vernors and Sussex in Canada; and Squirt and Canada Dry in Mexico. The new agreement will have an initial term of 20 years, with 20-year renewal periods, and will require PepsiCo to meet certain performance conditions.

Additionally, in US territories where it has a distribution footprint, DPS will begin selling certain owned and licensed brands, including Sunkist soda, Squirt, Vernors and Hawaiian Punch, that were previously sold by PBG and PAS.

Larry Young, president and CEO of DPS, said: “We’re confident that this new arrangement, which maintains our balanced and flexible routes to market, is in the best interests of our brands and our shareholders. It demonstrates the value and growth potential of these great brands and strengthens our third-party route to market while benefiting our own Packaged Beverages business. We’re excited to be working with PepsiCo and are confident in the continued long-term growth of our business.”

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Saturday, September 23, 12:23 am

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