Is Dr Pepper a Coke or Pepsi Product?

does coke or pepsi own dr pepper

Last Updated on 11/24/2017 by GS Staff

[otw_shortcode_dropcap label=”Q:” size=”large” border_color_class=”otw-no-border-color”][/otw_shortcode_dropcap] Is Dr Pepper a Coke or Pepsi Product?

[otw_shortcode_dropcap label=”A:” size=”large” border_color_class=”otw-no-border-color”][/otw_shortcode_dropcap] Dr Pepper is not a Coke or Pepsi product. Dr Pepper is owned by the Dr Pepper Snapple Group, a publicly traded company, which trades under the stock symbol DPS. Coke and Pepsi are separate companies that trade under KO and PEP, respectively.

Coca-Cola did attempt to merge with Dr Pepper in February 1986. The merger was valued at $470 million. However, the Federal Trade Commission (FTC) determine that there were anti-competitive issues surrounding the merger. Keep in mind that Pepsi also sought approval to purchase Seven-Up for $380 million at this time as well. The four companies (Coca-Cola, PepsiCo, Seven-Up, and Dr Pepper) were the top producers of carbonated soft drinks in the mid-1980’s. The mergers would have created two companies who controlled approximately 79 percent of the carbonated soft drink market.

Ultimately, Pepsi called off the deal to purchase Seven-Up and Coca-Cola bailed on the Dr Pepper deal due to the FTC’s anti-competitive stance. Coca-Cola’s president and chief operating officer at the time indicated the following regarding the merger:

We feel that the acquisition would have been pro-competitive for the soft-drink industry and that eventually we would have been successful in the appeal process. However . . . we have agreed to terminate the acquisition agreement without pursuing the matter further through the courts. [Source]

Clearly, Coca-cola did not need Dr Pepper to succeed. Warren Buffett, one of the top 5 richest people in the world, made an approximate $1 billion investment in Coca-Cola stock a couple of years after the failed Dr Pepper merger. Coca-Cola’s stock was valued at about $2.50 per share upon Buffett’s initial investment. The stock trades at $45.88 today. Coca-Cola remains on the top of the list as Warren Buffett’s best investments of all time. The stock is still one of his company’s (Berkshire Hathaway) largest holdings valued at around $18.3 billion.

While Dr Pepper is not a Coke or Pepsi product, Coca-Cola does have a distribution/licensing agreement with Dr Pepper. In 2010, Coca-Cola paid Dr Pepper Snapple $715 million to distribute Dr Pepper and Canada Dry. The agreement was for 20 years with an automatic 20-year renewal period. Dr Pepper also has a similar agreement with Pepsico.

Image Credit: Cyclonebill