Texas-sized merger, then split

Keurig Dr Pepper will split its beverage empire after acquiring Peet's Coffee this week.

Why it matters: The megamerger will reshape the nonalcoholic beverage market and spin off two independent, publicly traded companies: one focused on coffee and one focused on soft drinks, including Dr Pepper, 7Up and Canada Dry.

Context: The acquisition and planned split undoes Dr Pepper and Keurig's 2018 merger.

• The standalone businesses will be better able to grow in their own markets, KDP CEO Timothy Cofer says.

Zoom in: The beverages business will remain headquartered in Frisco, and the coffee company will be in Burlington, Mass.

• Beverage Co. has over $11 billion in annual net sales, a fraction of the competitive $300 billion North American beverage market. Cofer will remain CEO of the beverage arm.

The intrigue: Keurig Dr Pepper owns more brands than many may realize, including A&W and IBC root beers, Mott's apple juice, Snapple, and cocktail mixers Schweppes, Clamato and Margaritaville Margarita Mix.

• The company also owns hydration drink brands Core and Bai, which makes Sydney Sweeney's Favorite.

Zoom out: The addition of Peet's Coffee, whose parent company is based in Amsterdam, is expected to generate $16 billion in annual net sales.

• The combination of Keurig and Peet's will compete with coffee juggernaut Nestle, which distributes Starbucks At Home, Nespresso and Nescafé.

The bottom line: In a sea of megabrands, Dr Pepper remains Texas-based.