Keurig Dr Pepper has announced a major acquisition, buying Dutch coffee giant JDE Peet’s — the maker behind popular brands like Douwe Egberts, Kenco, and Peet’s Coffee — for more than $18 billion. In addition, the company will undergo a major transformation, splitting into two separate publicly listed businesses: one focused on beverages and the other on global coffee operations.
The deal will see Keurig Dr Pepper paying JDE Peet’s shareholders €31.85 ($37.26) per share in cash, amounting to a total purchase price of €15.7 billion ($18.4 billion). Once the acquisition is complete, Keurig Dr Pepper intends to establish two independent entities: Beverage Co. and Global Coffee Co.
Keurig Dr Pepper, which produces well-known drinks like Dr Pepper, 7Up, and Keurig coffee machines, has been a key player in both the beverage and coffee markets. Last year, Dr Pepper was the second most popular soda in the U.S., trailing only Coca-Cola, while coffee is even more beloved, with Americans consuming a staggering 516 million cups per day.
The U.S. is the world’s largest coffee importer, but rising costs are affecting the market. Factors such as climate change, global conflicts, and tariffs from President Donald Trump have all contributed to the rising price of coffee beans, which have nearly doubled in cost over the past five years.
Keurig Dr Pepper’s CEO, Tim Cofer, stated, “This is the right time for this transaction,” highlighting the company’s strong operational and financial position, as well as the increasing resilience of the coffee category.
Once formed, the newly established Global Coffee Co. will be the world’s largest “pure-play” coffee company, expected to generate annual sales of $16 billion, and will sell coffee in over 100 countries.
The two companies are expected to split as soon as possible, with Tim Cofer leading Beverage Co., while Keurig Dr Pepper’s Chief Financial Officer, Sudhanshu Priyadarshi, will take the reins at Global Coffee Co.
Keurig Dr Pepper was created in 2018 through the merger of Keurig Green Mountain and Dr Pepper Snapple.
Key Takeaway: Keurig Dr Pepper is taking bold steps in reshaping its future with this $18 billion acquisition and company split, focusing on expanding its presence in both the beverage and coffee sectors.
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SOURCE:cnn.com
