The makers of Keurig coffee and Dr. Pepper are merging

Daniel Boczarski/Getty Images for Dr. Pepper

Dr. Pepper Snapple and Keurig Green Mountain are merging.

In a statement on Monday, the companies announced that Keurig has agreed to buy Dr. Pepper Snapple for $103.75 per share in a special cash dividend.

The new company will be called Keurig Dr. Pepper. The snacks company Mondelez International will own 13%-14% of the combined firm.

Dr. Pepper shares surged 42% to $135.93 in premarket trading.

"We are very excited about the prospect of KDP becoming a challenger in the beverage industry," said Bart Becht, the chairman of Keurig.

More to come ...