Keurig Dr Pepper (KDP) has announced its acquisition of Dutch coffee group JDE Peet’s in a landmark €15.7 billion ($18.4 billion) deal. The transaction will not only create the world’s largest dedicated coffee business but also result in a structural split of Keurig Dr Pepper into two independent, publicly listed companies: one for soft drinks and another for coffee.
Transaction Overview
Keurig Dr Pepper will pay €31.85 per share for JDE Peet’s, marking a 20% premium over its recent trading price. Once complete, the company will separate into:
- Beverage Co., which will oversee the soft drinks business, including Dr Pepper, 7Up, and Snapple.
- Global Coffee Co., a standalone coffee powerhouse encompassing brands such as Douwe Egberts, Peet’s Coffee, and Kenco.
“This is the right time for this transaction,” said Keurig Dr Pepper CEO Tim Cofer. He highlighted the company’s “operational and financial strength” and the “resilience” of its coffee portfolio as key motivators for the move.
Global Coffee Co.: A New Market Leader
With projected annual sales of around $16 billion, Global Coffee Co. is set to become the largest pure-play coffee company in the world, distributing in more than 100 countries.
- Sudhanshu Priyadarshi, current CFO of Keurig Dr Pepper, will lead the new coffee entity.
- Tim Cofer will continue to serve as CEO of Beverage Co.
The company said the split would occur “as soon as practicable,” once regulatory and shareholder approvals are finalized.
Market Reactions and Strategic Implications
Following the announcement:
- JDE Peet’s shares surged 17.48% in Amsterdam — the highest one-day gain in the company’s history.
- Keurig Dr Pepper shares fell 11.48%, reflecting initial investor caution over the deal’s size and complexity.
Analysts, however, believe the separation of coffee and beverage operations may unlock long-term value. “While the transaction is complex and involves a large acquisition, we see significant value in the separation of the Coffee & Beverage businesses,” said analysts at Citi.
Industry Context
The deal comes amid rising pressure across the global coffee industry. The U.S. remains the world’s largest importer of coffee, with American consumers drinking over 500 million cups daily. However, global coffee prices have nearly doubled in the past five years, driven by:
- Climate change disrupting harvests in major producing countries
- Geopolitical conflicts impacting trade routes and supply chains
- Tariffs imposed under President Donald Trump, increasing import costs
- Rising global demand for premium and specialty coffee
Keurig Dr Pepper, originally formed in 2018 through the merger of Keurig Green Mountain and Dr Pepper Snapple, now positions itself for the next phase of growth by separating its two largest segments to operate more independently and strategically.
