Confirmed $18 Billion Deal Sees Keurig Dr Pepper Acquire JDE Peet's

Keurig Dr Pepper, one of the giants of the drink industry, is set to acquire European coffee company JDE Peet's as part of their strategy to split into two companies.

Keurig Green Mountain, a coffee giant, acquired the Dr Pepper Snapple Group for $18.7 billion in 2018, forming one company that could provide customers with various beverages. The group's subsidiaries include Snapple, 7UP, Crush, Sunkist, A&W, and Schweppes in the drink market, along with various coffee and donut shops like Krispy Kreme, McCafé, and LavAzza.

Now, in an $18 billion deal, the company will acquire JDE Peet's, a Dutch multinational coffee company. JDE Peet's was formed after the merger of the coffee division of Mondelez International and Dutch coffee company Douwe Egberts, creating Jacobs Douwe Egberts (JDE). Then, in 2019, the enterprise merged with Peet's Coffee, forming JDE Peet's, which also owns subsidiaries like L'Or, Moccona, and Pilāo.

However, Keurig Dr Pepper's purchase of JDE Peet's actually isn't an acquisition– it is part of their strategy to reorganize their business. As coffee sales have slowed down in recent years, Keurig Dr Pepper has struggled to keep up with increasing coffee bean prices and tough competition.

These increasing prices are primarily due to climate change, which has caused droughts across major coffee bean-producing countries, along with tariffs from the American government– US President Donald Trump has placed a staggering 50% tariff on Brazil, which supplies around 35% of unroasted American coffee beans.

On the contrary, the soda industry has boomed in recent years, with Keurig Dr Pepper's soda sales increasing by over 10.5% last quarter. Because of this, the company has been looking to spin off into two different businesses, with one focused on coffee and the other on soda and beverages.

To execute this, though, the company needed to bolster their coffee division before splitting up, and their newly-announced acquisition of JDE Peet's does exactly that. JDE Peet's, a European multinational company with subsidiaries all over the world, has not taken a hit from tariffs due to their lack of dependency on Brazilian coffee, and the coffee industry in other parts of the globe is still going strong– in fact, in the first half of this year alone, JDE Peet's sales increased by over 19.8% from 2024.

To complete the reorganization, Keurig Dr Pepper will spin off into two companies in early 2026. The coffee giant, named Global Coffee Co., will contain Keurig, JDE Peet's and their coffee-related subsidiaries, while the Beverage Co. will take ownership of Dr Pepper and the rest of Keurig Dr Pepper's refreshment-related subsidiaries. Global Coffee Co. is expected to have an annual revenue of around $16 billion, while the Beverage Co. will generate around $11 billion in annual revenue, and the split is expected to save a total of around $400 million for the company.

Meanwhile, the leadership of both companies will change as well. Tim Cofer, the current CEO of Keurig Dr Pepper, will lead the Beverage Co. at its headquarters in Frisco, Texas, while CFO Sudhanshu Priyadarshi will lead the Global Coffee Co. from its headquarters in Burlington, Massachusetts. Nevertheless, the enterprise will maintain an international headquarters in Amsterdam.

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