The deal will bring together popular soft drink and juice brands Dr Pepper, 7UP, Snapple, A&W, Sunkist and Mott’s with leading coffee brand Green Mountain Coffee Roasters and the Keurig single-serve coffee system.

BURLINGTON, Mass. — Keurig Green Mountain Inc. and Dr Pepper Snapple Group plan to merge in a deal that will create a new beverage giant, Keurig Dr Pepper (KDP), in the North American market.

Under the agreement announced Monday, Dr Pepper Snapple shareholders will receive $103.75 per share in a special cash dividend — for a total of $18.7 billion — and retain 13% of Keurig Dr Pepper, while Keurig shareholders will hold 87%.

Keurig Dr Pepper will have pro forma combined sales of about $11 billion. The transaction will bring together popular soft drink and juice brands Dr Pepper, 7UP, Snapple, A&W, Sunkist and Mott’s with leading coffee brand Green Mountain Coffee Roasters and the Keurig single-serve coffee system, plus more than 75 owned, licensed and partner brands in the Keurig system.

“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 and attract new brands and beverage categories to our platform in a fast-changing industry landscape,” Larry Young, president and chief executive officer of Dr Pepper Snapple Group, said in a statement. “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.”

Besides creating a broad roster of top beverage brands, the Keurig-Dr Pepper Snapple merger will boost distribution capability to reach almost every point-of-sale in North America, the companies noted.

“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,” according to Bob Gamgort, CEO of Keurig Green Mountain. “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.”

Also under the merger deal, global investment firm JAB Holding Co. and its partners, including BDT Capital Partners, will make a combined equity investment of $9 billion as part of the transaction’s financing. When the transaction is finalized, JAB will be the controlling shareholder. Mondelēz International, JAB’s partner in Keurig, will hold a 13% to 14% stake in the merged company. JAB led an investor group, including Mondelēz and BDT, that took Keurig private in a $13.9 billion buyout completed in March 2016.

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

Plans call for Keurig’s Gamgort to serve as CEO of Keurig Dr Pepper and Keurig chief financial officer Ozan Dokmecioglu to become CFO of KDP. Young is slated to transition to a role on KDP’s board of directors to assist the new management team. Becht will be chairman of KDP, and Gamgort will become an executive member of the board. Four additional directors will be appointed by JAB, two directors will be appointed by Dr Pepper Snapple — including Young — and two directors will be appointed by Mondelēz. Two independent directors also will be appointed.

Keurig and Dr Pepper Snapple said they will continue to operate out of their respective locations in Burlington, Vt., and Plano, Texas. Gamgort will be based in Burlington. Keurig Dr Pepper will draw on the leadership of both companies, who will continue to run their respective businesses, the companies said.

The merger transaction is expected to close in the second calendar quarter of this year, pending regulatory and shareholder approvals and other customary closing conditions.

“We have been very pleased with our coffee partnership with Keurig, and strongly support the strategic rationale for this transaction,” commented Dirk Van de Put, CEO of Mondelēz International. “We look forward to continuing to participate in the compelling value-creation and long-term growth opportunities inherent in this powerful beverage platform.”