DPSG is quids in

DPSG is quids in

Dr Pepper Snapple Group has secured a US$715m payment from The Coca-Cola Co as the two firms have agreed a distribution deal in the US and Canada.

The licence agreement, which sees Coca-Cola handle distribution of DPSG's Dr Pepper trademark brands in the US and Canada Dry in the north-east US, will have an initial term of 20 years. Coca-Cola will also distribute Canada Dry, C’Plus and Schweppes in Canada.

The brands had previously been distributed by Coca-Cola Enterprises, which Coca-Cola confirmed that it would acquire the North American operations of back in February.

Coca-Cola will also offer Dr Pepper and Diet Dr Pepper in local fountain accounts currently serviced by CCE and will include Dr Pepper and Diet Dr Pepper on its Freestyle fountain dispenser. The Freestyle agreement has a term of 20 years, with DPS’s investment estimated at $115m to $135m.

“Through this new relationship, The Coca-Cola Co will become one of the largest Dr Pepper trademark bottlers in the US," said Coca-Cola's chairman and CEO, Muhtar Kent.

The $715m payment comes in slightly below what had been expected, but markedly higher than one analyst had forecast last month.