Dr Pepper to Buy Bai for $1.7 Billion
November 22 2016 - 8:20AM
Dow Jones News
Dr Pepper Snapple Group Inc. on Tuesday said it agreed to buy
Bai Brands LLC, the maker of low-calorie, coffee-fruit drinks, for
$1.7 billion, as consumers continue to turn away from traditional
sodas.
Bai is known for its drinks that are made with extracts from the
fruit that surrounds the coffee bean. The beverages are marketed as
using natural sweeteners and being rich in antioxidants and low in
calories. Bai's product lineup includes enhanced water, carbonated
flavored water, coconut water and ready-to-drink teas.
Dr Pepper Snapple said the move allows it to meet the growing
demand for beverages deemed healthier and more natural.
Soda makers have adapted to changing consumer tastes by
marketing soda as a special treat and by selling smaller sizes.
Companies have also said they are working to reduce the amount of
sugar in their products and to diversify beyond soda as more
countries weigh special taxes on high-calorie drinks in a bid to
combat rising obesity and diabetes.
Dr Pepper Snapple is already an investor in Bai and has
distributed Bai products for a few years. Bai, which was launched
in Princeton, N.J., in 2009 and expects to have about $425 million
in net sales in 2017.
The deal, expected to close in the first quarter of next year,
will reduce Dr Pepper Snapple's earnings by about 3 cents a share
next year due to increased marketing expense for the brand and
costs associated with financing the purchase.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
November 22, 2016 08:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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