Keurig Dr Pepper to Buy JDE Peet’s for $18 Billion in Revamp

Keurig Dr Pepper Inc. agreed to buy JDE Peet’s NV for €15.7 billion ($18.4 billion) to bolster its struggling coffee business before kicking off a split of its operations.

The company will pay €31.85 a share in cash for the Dutch firm, a 20% premium over its closing price on Aug. 22, according to a statement Monday. Keurig Dr Pepper plans to separate its coffee and soft drinks units into two independent, US-listed companies next year once the deal is completed.

“We are seizing an exceptional opportunity to create a global coffee giant,” Chief Executive Officer Tim Cofer said.

Bloomberg's Ken Shea reports.

The transactions would effectively undo the 2018 takeover of soda maker Dr Pepper by Keurig, which was orchestrated by investment firm JAB Holding Co. to create a leader in both cold and hot beverages. But the coffee business sputtered amid tougher competition in the US and higher bean prices, while the other beverages have been doing well.

Shares in Keurig Dr Pepper fell 8.9% in New York, the biggest intraday drop in more than five years. S&P analysts warned they may cut the company’s credit rating due to plans to “significantly increase its debt to execute what we consider to be a complex, two-step transaction,” according to a statement. Shares in JDE Peet’s rose as much as 18% in Amsterdam.

Consolidation among food and beverage companies has been ramping up as businesses grapple with shifting consumer preferences, inflation and surging commodity costs. Coffee futures have spiked over the last year due to adverse weather hurting supply in key growing areas. President Donald Trump is also imposing a 50% tariff on imports from top coffee producer Brazil, adding to the challenges.

“Pure play companies tend to work best” in the fast-moving consumer goods industry, Barclays analysts wrote in a note.

Keurig Dr Pepper saw roughly flat US coffee sales in the second quarter as it warned the business will remain subdued for the balance of 2025, in part due to inflation and tariffs. Higher prices for K-Cups were offset by lower shipments of both single-serve pods and brewers.

Meanwhile JDE Peet’s — with more than 50 coffee and tea brands around the world, including L’OR, Peet’s and Jacobs — surpassed organic revenue estimates for the first half of the year and raised its full-year outlook. New CEO Rafael Oliveira has overhauled the coffee producer’s strategy after the rise in bean prices squeezed margins.

JAB Holding is also behind JDE Peet’s, building the firm from a series of acquisitions to challenge global coffee leader Nestle SA. The holding company manages funds for the billionaire Reimann family, who established chemical and industrial manufacturing company Benckiser in Germany. JAB orchestrated the Keurig takeover of soda maker Dr Pepper in 2018.

JAB and certain JDE Peet’s executives committed to tendering their shares in the transaction, representing 69% of the Dutch firm’s voting stock. JAB also holds about 4.4% of Keurig Dr Pepper outstanding shares, data compiled by Bloomberg show.

“This transaction delivers more than $12.5 billion in cash proceeds, creating a rock-solid balance sheet that ideally positions JAB to pursue strategic opportunities across our consumer and insurance segments,” JAB Holding said in e—mailed comments.

Upon separation, the combined coffee company will have about $16 billion in annual sales while the beverage firm will have more than $11 billion in revenues, according to the statement.

“It will create a stronger global No. 2 in coffee behind Nestle by enhancing its US position,” Bloomberg Intelligence analyst Duncan Fox said.

Nestle’s coffee-related revenue — including Nespresso and Nescafe — amounted to more than 23 billion Swiss francs ($28.7 billion) last year, according to its annual report.

Keurig Dr Pepper has been investing in other beverage categories as coffee struggled. The company agreed in October to buy the maker of Ghost energy drinks for more than $1 billion. Other brands owned by the Burlington, Massachusetts-based company include Snapple, Yoo-Hoo and Hawaiian Punch.

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