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Dr Pepper Snapple to buy Bai Brands for $1.7 billion in cash

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Staff Writer | November 22, 2016
Dr Pepper Snapple Group has reached an agreement to acquire Bai Brands and its complete portfolio of high-growth premium antioxidant infused beverages.
Dr Pepper Snapple Group
Acquisition   To generate approximately $425 million
The cash purchase price of $1.7 billion includes a tax benefit of approximately $400 million on a net present value basis and will be financed through new unsecured notes and short term commercial paper.

The company expects to maintain its strong investment grade credit profile and have no plans to change its existing shareholder dividends and share repurchase distributions.

Bai provides a strong platform to incubate and grow better-for-you beverages throughout the non-carbonated and carbonated beverage sectors.

It is expected to generate approximately $425 million in net sales in 2017 and add an incremental $132 million to our current net sales expectation for 2017.

The transaction is expected to be approximately $0.03 dilutive to reported diluted EPS in 2017 driven by planned increases in marketing investments behind the brand and increased interest expense associated with the financing of the purchase price.

The transaction is expected to be accretive to reported diluted EPS in 2018.