In a move that took industry watchers by surprise, Plano-based Dr Pepper Snapple Group on Monday announced a definitive merger agreement with Keurig Green Mountain. The deal will create a company with $11 billion in revenue and move control of a storied Texas brand out of the state.

Under an agreement approved by the Dr Pepper board, Dr Pepper Snapple shareholders will receive $103.75 per share in a special cash dividend and retain 13 percent of the combined company.

Research firm Dealogic estimated the equity value of the deal at $18.9 billion, making it the largest M&A soft drink transaction on record, globally.

Stock in the nation's third-largest soft drink player has been trading in the mid-$96 range and closed at $117.07.

The company already had a partnership with Keurig, selling Snapple tea in K-Cups. Monday it spoke of the "long-term growth opportunities inherent in this powerful beverage platform."

The combined beverage company will have strong players in the grocery aisles and at the breakfast table. Brands include Waco-born Dr Pepper, 7UP, Snapple, A&W, Mott's, popular coffee brand Green Mountain Coffee Roasters and the Keurig single-serve coffee system, as well as more than 75 owned, licensed and partner brands in the Keurig system.

In partnering with the K-Cup maker, Dr Pepper gains a foothold in hot beverages and adds muscle in e-commerce. Keurig Green Mountain, which has been in turnaround mode, gains Dr Pepper's massive distribution network, including more access to highly profitable convenience and dollar stores.

The move comes less than two years after Keurig became a private company following its acquisition by the investor group JAB in March 2016.

JAB Holding Co., a Luxembourg-based investment firm that also owns controlling stakes

in Panera Bread, Peet's Coffee & Tea and other well-known U.S. brands, will make an equity investment of $9 billion as part of the financing of the deal.

It will retain 87 percent of the combined company. The 13 percent stake left with the Dr Pepper shareholders still will be publicly traded.

Keurig and Dr Pepper Snapple will continue to operate "business as usual" out of their current locations, the companies said.

In addition to the Legacy Drive headquarters, Dr Pepper Snapple Group has a major manufacturing and distribution center in Irving and distribution centers near Sherman and Corsicana.

A Dr Pepper spokesman estimated the company has about 2,300 employees here.

A Green Mountain Coffee single-serving brewing cup is seen in a Keurig machine. (Toby Talbot / The Associated Press)

Bob Gamgort, current chief executive of Keurig, will serve as chief executive of the combined company and be based in Burlington, Mass. If the combined company headquarters follows the CEO, North Texas loses a Fortune 500 listing.

Ozan Dokmecioglu, current chief financial officer of Keurig, will serve as its chief financial officer.

Larry Young, president and chief executive of Dr Pepper, who has been with the Dr Pepper brand for decades, will transition to a role on the new company's board of directors to "help the new management team realize the full potential of the company," Dr Pepper said.

A Dr Pepper spokesman said it was "too early to speculate on specific details" of what will happen with the other corporate executives in North Texas.

"This transaction will deliver significant and immediate value to our shareholders, along with the opportunity to participate in the long-term upside potential of our combined company and attract new brands and beverage categories to our platform in a fast-changing industry landscape," Young said in a statement.

He was not available for additional comment, but on CNBC he called the deal "fabulous" for consumers and Dr Pepper shareholders.

Duane Stanford is executive editor of the trade publication Beverage-Digest. He said the deal gives the coffee company access to Dr Pepper's scale and packaging ability, which could lead to more cold coffee in cans and bottles. It helps expand the Dr Pepper portfolio, which is heavily invested in carbonated soft drinks, a category that has been losing fizz for years.

"Coffee is hot," he said. "That's a high-growth area. Consumers really want it and they will pay a premium. JAB is looking to capitalize on those trends. You need to partner with someone in distribution.

"This is [more] about JAB leveraging Dr Pepper rather than Dr Pepper diversifying."

Previously called Cadbury Schweppes Americas Beverages, Dr Pepper Snapple Group was spun off from Cadbury Schweppes in 2008. Cadbury Schweppes Americas Beverages was formed in 2003 by bringing together Cadbury Schweppes' four North American beverages businesses, Dr Pepper/Seven Up Inc., Snapple Beverage Group, Mott's and Bebidas Mexico.

That move brought together more than 50 brands.

Bottles of Snapple in a cooler at Quality Cash Market in Concord, N.H. In a deal announced Monday, Jan. 29, 2018, Keurig will buy Dr. Pepper Snapple Group, creating a beverage giant with about $11 billion in annual sales. (Jim Cole / The Associated Press)

Even with acquisitions of its own, Dr Pepper Snapple has long been in the bronze position among soft drink makers trailing PepsiCo, parent of its Plano neighbor Frito-Lay, and market leader Coke.

Dr Pepper estimates it will have $6.7 billion in 2017 sales, up from $6.4 billion in sales in 2016, but still a fraction of PepsiCo's nearly $63 billion in 2016 sales.

There's long been industry speculation about what Dr Pepper would do to bulk up, but few expected a coffee deal.

Unlike PepsiCo, which gets a substantial amount of revenue from Frito-Lay, Dr Pepper sells mostly carbonated soft drinks. Some consumers have moved away from those drinks, both diet and fully sweetened, out of health and weight concerns.

Dr Pepper Snapple last year invested more in the enhanced water category with the purchase of Justin Timberlake-backed Bai for $1.7 billion.

Keurig is also hoping to tap into growing interest in the internet of things, with the launch of Wi-Fi-connected brewers which will give the company "first-ever point-of-consumption data."

Keurig has sparked concern among some environmentalists who fret about the massive number of those tiny pods working their way into the landfill. In a call with analysts Monday, the company said it hopes to have recyclable pods throughout the U.S. by 2020.

Who is JAB Holding?

In the deal, Dr Pepper Snapple would become part of a German conglomerate known as JAB Holding. JAB is a privately held company started from the fortune of German chemist Ludwig Reimann. His heirs own 91 percent of the company, which is based in Luxembourg. The conglomerate, which started in industrial chemicals, now owns or controls some of the most well-known consumer goods brands in the world.

Associated companies and brands

Acorn Holdings : Coffee brands including Gevalia, Green Mountain Coffee, Timothy's, Tullys and Donut Shop.

Coty : Prestige perfume labels, including Calvin Klein and Gucci. Cosmetics brands including CoverGirl, Adidas, Philosophy, Rimmel and Sally Hansen.

Reckitt Benckiser Group : Household goods including air freshener Air Wick, cleaners Lysol and Vanish, laundry soap Woolite, dishwashing detergent Finish and anti-acne treatment Clearasil.

JAB Beech : Breakfast and coffee places including Peet's Coffee & Tea, Einstein Bros. Bagels, Bruegger's Bagels, Krispy Kreme donuts, and Panera Bread.

JAB Luxury: Switzerland-based Bally

Timeline of JAB deals

1992: Buys Coty from Pfizer for $440 million.

2007: Founds luxury clothing group Labelux.

2011: Purchases shoemaker Jimmy Choo for about $875 million.

2012: Buys Peet's Coffee & Tea

2015: Purchases control of Mondelez International's coffee business

2016: Buys Krispy Kreme Doughnuts for $1.35 billion and acquires Keurig Green Mountain for $14 billion

2017: Sells Jimmy Choo

2018: Seeks to acquire Dr Pepper Snapple

Sources: Bloomberg, Dallas Morning News research

Twitter: @krobijake