Keurig Dr Pepper to Acquire JDE Peet's in $18.4 Billion Deal, Plans Strategic Split into Two Companies

Keurig Dr Pepper (KDP) announced on August 25, 2025, its acquisition of Dutch coffee company JDE Peet's for approximately $18.4 billion (€15.7 billion) in cash. This strategic move aims to create the world's largest pure-play coffee company by combining KDP's North American single-serve coffee platform with JDE Peet's extensive international portfolio. Following the acquisition, KDP plans to separate into two independent, publicly traded companies: "Global Coffee Co." and "Beverage Co." The transaction is expected to close in the first half of 2026, with the subsequent separation occurring as soon as practicable thereafter.

Under the terms of the agreement, KDP will pay JDE Peet's shareholders €31.85 per share in cash, representing a 33% premium over JDE Peet's 90-day volume-weighted average stock price. This values the total equity at approximately €15.7 billion ($18.4 billion). The acquisition will be financed through a combination of new senior unsecured and junior subordinated debt and cash on hand. KDP expects to maintain its investment-grade credit rating post-transaction.

Following the acquisition, KDP plans to separate into two independent, publicly traded companies:

1. Global Coffee Co.: This entity will focus on the global coffee market, leveraging the combined strengths of KDP's single-serve coffee platform and JDE Peet's international brand portfolio. It is expected to generate approximately $16 billion in annual net sales. Sudhanshu Priyadarshi, KDP's current CFO, will serve as CEO of Global Coffee Co.

2. Beverage Co.: This company will concentrate on North American refreshment beverages, including brands like Dr Pepper, 7UP, and Snapple. It is projected to have over $11 billion in annual net sales. Tim Cofer, KDP's current CEO, will lead Beverage Co.

The acquisition and subsequent separation are designed to create two focused entities that can better address their respective markets. By combining KDP's innovative single-serve technology with JDE Peet's extensive brand portfolio and international presence, Global Coffee Co. aims to become a global leader in the $400 billion coffee market. Beverage Co., with a dedicated focus on the $300 billion North American refreshment beverage market, plans to leverage its iconic brands and direct-store-delivery network to drive growth.

The combined entity anticipates achieving approximately $400 million in cost synergies over three years through shared procurement, logistics, and R&D. While the acquisition will increase KDP's debt, the company plans to manage this through strong EBITDA margins and the strategic benefits of the separation.

Following the announcement, JDE Peet's shares surged 17.5%, marking their strongest day on record. In contrast, U.S.-listed shares of KDP declined by about 7%, reflecting investor concerns over the acquisition's financing and the planned separation.

This acquisition and subsequent separation signify a major shift in the beverage industry, potentially setting a precedent for other companies to reevaluate their portfolios and consider similar strategic realignments. While the companies anticipate cost synergies, the impact on employment within both organizations remains to be seen. The creation of two focused entities may lead to restructuring and potential job realignments.

This move effectively unwinds the 2018 merger between Keurig Green Mountain and Dr Pepper Snapple Group, which at the time created the third-largest beverage company in North America. The current strategy reflects a shift towards specialization, allowing each new entity to focus on its core competencies.

"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. By creating two sharply focused beverage companies with attractive and tailored growth propositions and capital allocation strategies, we are poised to generate significant shareholder value in both the near and long term."

The transaction is subject to regulatory approvals and is expected to close in the first half of 2026, with the subsequent separation occurring as soon as practicable thereafter.