* Deal value includes tax benefit of about $400 mln
* Bai to add $132 mln to 2017 net sales
* PepsiCo to buy probiotics drink maker KeVita (Adds details, share movement)
Nov 22 (Reuters) - Dr Pepper Snapple Group Inc said on Tuesday it would buy antioxidant beverages maker Bai Brands LLC for $1.7 billion in cash, the latest example of a soft-drinks maker investing in products that are perceived to be healthier.
Dr Pepper Snapple, which makes flavored tea and juice drinks under the Snapple brand and also 7UP and Schweppes sodas, already had a roughly 3 percent stake in Bai and distributed the company's drinks through its network.
Bai, which means "pure" in Mandarin Chinese, sweetens its drinks with plant-based ingredients and infuses them with antioxidants from coffee fruit and white tea.
Bai's drinks - which include carbonated flavored water, coconut water and premium ready-to-drink teas - have no artificial sweeteners and only 5 calories and 1 gram of sugar per serving, the companies said in a joint statement.
Reuters reported in October that Dr Pepper Snapple was in talks to buy the company.
Dr Pepper Snapple shares were up 1.7 percent in morning trading.
The deal, the company's first major acquisition since being spun out of Cadbury Schweppes in 2008, comes as consumers increasingly seek calorie-free alternatives to sugary drinks and as several U.S. cities voted for a new soda tax.
Soda giants have either built stakes or have bought beverage companies that make healthier drinks to cater to changing consumer preferences.
PepsiCo Inc said on Tuesday it would buy KeVita Inc, which makes more than two dozen flavors of probiotic drinks that are organic, gluten-free and vegan.
Coca-Cola Co has bought organic bottled-tea maker Honest Tea and Zico Coconut Water and invested in organic juice maker Suja.
Princeton, New Jersey-based Bai was founded in 2009 by entrepreneur Ben Weiss, who owns a majority stake in the company and will continue to lead Bai within Dr Pepper Snapple's packaged beverages business.
Dr Pepper Snapple said the purchase price includes a tax benefit of about $400 million on a net present value basis, and the deal will be financed through new unsecured notes and short-term commercial paper.
Dr Pepper Snapple said Bai would add $132 million to its net sales in 2017, but hurt earnings by 3 cents per share due to higher marketing costs and interest expenses related to financing the deal. The deal is expected to add to profits in 2018.
Credit Suisse Securities (USA) LLC is Dr Pepper Snapple's exclusive financial adviser and Morgan, Lewis & Bockius its legal adviser.
J.P. Morgan Securities LLC is Bai's exclusive financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP gave legal counsel. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Savio D'Souza, Sayantani Ghosh and Anil D'Silva)