Keurig Dr Pepper to Acquire JDE Peet’s for $18B, Then to Split in Two

It seemed like an odd combination in 2018 when Keurig Green Mountain merged with Dr Pepper Snapple Group. That marriage soon will be over when Keurig Dr Pepper acquires JDE Peet’s for €15.7 billion ($18.4 billion today) and then separates into two separate companies, one focused on coffee globally and the other on soft drinks, mostly domestically.

KDP today announced the agreement to acquire Amsterdam-based JDE Peet’s in an all-cash transaction. At the moment, the post-split companies simply are being called Beverage Co. and Global Coffee Co.

Keurig Dr Pepper was our Processor of the Year for 2024. For that deep dive into the company, click here.

The merger will be a homecoming of sorts for Keurig, as prior to the merger with Dr Pepper, that company was owned by JAB Holding Co., the same investors behind JDE Peet’s. Mondelez International also was an equity holder in Keurig when Mondelez and JAB engineered the acquisition of Dr Pepper for $18.7 billion. Publicly held Dr Pepper was the surviving company until the name change to KDP, so stock in the new company would be publicly traded.

Under the terms of today’s announced transaction, KDP will pay JDE Peet’s shareholders €31.85 ($37.33) per share in cash, a 33% premium to JDE Peet’s 90-day volume-weighted average stock price.

Upon separation, Global Coffee Co., with approximately $16 billion in annual sales, will be the world’s largest pure-play coffee company, the companies claim. It will have reach across more than 100 countries, including 40 in which the company holds the No. 1 or No. 2 market position by sales.

Beverage Co., with more than $11 billion in annual net sales, “will be a scaled challenger in the $300 billion North American refreshment beverage market,” today’s announcement said.

Presumably, both will be publicly listed companies.

“Today’s announcement marks a transformational moment in the beverage industry, as we build on KDP’s disruptive legacy by creating two winning companies, including a new global coffee champion,” said Tim Cofer, CEO of KDP. “Through the complementary combination of Keurig and JDE Peet’s, we are seizing an exceptional opportunity to create a global coffee giant. This is the right time for this transaction, with KDP in a position of operational and financial strength, momentum across our evolved portfolio, and increasing coffee category resilience.”

Right time?

These are tough times for coffee companies. Consumption began to wane after the commodity hit an all-time high of $4.09 per lb. in February of this year. Prices traditionally ranged between $1 and $2.50 per lb. Although prices have dipped since February’s spike, they’re again nearing the $4 mark. Factor in tariffs.

Upon completion of the acquisition of JDE Peet’s and until the intended separation is complete, the combined company will be led by KDP’s management team, including CEO Tim Cofer and CFO Sudhanshu Priyadarshi.

Upon completion of the separation, Cofer will become CEO of Beverage Co. and Priyadarshi will become CEO of Global Coffee Co. Rafa Oliveira will continue to serve as CEO of JDE Peet’s until the closing of the acquisition.