Mondelez International Inc. (NASDAQ:MDLZ) said on Monday that it does not plan to invest new capital into the proposed merger of Keurig Green Mountain Inc. and Dr. Pepper Snapple Group Inc. (NYSE:DPS).
Coffee maker Keurig is to buy Dr Pepper Snapple in a deal that will pay US$18.7bn in cash to shareholders of the soda company.
READ: Dr Pepper Snapple agrees to be taken over by Keurig Green Mountain
Snapple shareholders will receive US$103.75 each in a special cash dividend, giving them a 13% stake in the combined company, which will be called Keurig Dr Pepper.
Mondelez, which currently owns a 24.24% stake in Keurig, will own 13% to 14% of the enlarged group.
The confectionary giant said it has entered into an agreement that means it will not be allowed to sell any of its shares in Keurig Dr. Pepper for six months.
Under the deal, Mondelez will have the right to nominate two directors to the new company's board of directors.
But if its stake falls below 8%, it can nominate one board member, and if it drops below 5%, it will have no right to nominate any directors.
The billionaire Reimann family’s JAB Holding Co. will be the controlling shareholder of the enlarged group.
JAB bought Keurig in 2016 in partnership with Mondelez.
Keurig’s planned takeover of Dr Pepper is expected to close in the second quarter, subject to shareholder approval.