Coke pays $715 million to distribute Dr Pepper

Updated 21m ago

ATLANTA (AP) — Coca-Cola Co. says it will distribute certain drinks made by Dr Pepper Snapple (DPS) and as part of a $715 million deal.
The agreement was announced Monday morning.

Under the terms of the deal, Coca-Cola (KO) will distribute Dr Pepper and Canada Dry ginger ale in the United States. It will also distribute drinks in Canada. Dr Pepper Snapple gets a one-time $715 million payment from Coca-Cola.

The beverages were previously distributed by Coca-Cola Enterprises, which Coca-Cola is acquiring. Monday's agreement replaces an established deal between Coca-Cola Enterprises and Dr Pepper.

The new agreement will last for 20 years and includes renewal options.

As part of the deal, Dr Pepper and Diet Dr Pepper will be included in Coke's new "Freestyle" fountain dispenser, which can mix more than 100 drinks.

Dr Pepper paid Coca-Cola between $115 million and $135 million to be the only non-Coke product on the high-tech dispenser, which is expected to be in 500 locations by the end of the summer.

In December, Dr Pepper inked a similar deal with Pepsi (PEP) for $900 million. Both Coca-Cola and Pepsi are trying to gain more control over their bottlers and distributors, hoping to get new drinks on shelves more quickly to keep up with changing tastes.

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