Keurig Dr Pepper to Acquire JDE Peet’s
Keurig Dr Pepper (KDP), the US-based leading single-serve coffee platform, has signed an agreement to acquire JDE Peet’s in an all-cash transaction valued $18.27 billion to create a global coffee champion through the complementary combination of KDP’s Keurig with JDE Peet’s worldwide portfolio of beloved coffee brands.
After the acquisition closes, KDP plans to separate into two independent, US-listed publicly traded companies, creating a scaled growth challenger in North America’s attractive refreshment beverages market (Beverage Co) and the world’s number one pure-play coffee company (Global Coffee Co).
Under the terms of the transaction, KDP will pay JDE Peet’s shareholders $37.07 per share in cash, a 33% premium to JDE Peet’s 90-day volume-weighted average stock price, representing a total equity consideration of $18.27 billion. JDE Peet’s will also pay a previously declared dividend of $0.42 per share prior to closing, with no reduction to the offer price.
Acquisition of JDE Peet’s expected to deliver compelling synergies and generate significant value for KDP shareholders.
Planned separation, via a tax-free spin-off of Global Coffee Co., will position Beverage Co. and Global Coffee Co. to win in their respective markets by leveraging operating models optimized to unique category dynamics.
The deal will also create two strategically focused, scaled beverage companies with differentiated shareholder value propositions, featuring distinct growth and capital allocation frameworks designed to deliver sustained and compelling long-term value.
The acquisition of JDE Peet’s will significantly enhance KDP’s coffee positioning, creating a strong, resilient and diversified global portfolio. It will also unlock incremental operating and financial benefits, including approximately $400 million in anticipated cost synergies to be realized over three years and EPS accretion expected to start in year one of the combination.
Upon separation, Global Coffee Co., with approximately $16 billion in combined annual net sales, will be the world’s largest pure-play coffee company.
With reach across more than 100 countries, including 40 in which the company holds the top or second market position by sales, Global Coffee Co. It will enjoy an unparalleled portfolio across all coffee segments, channels and price points.
Coffee is one of the most consumed beverages globally, representing a $400 billion category with rapid growth in emerging markets, and Global Coffee Co. will lead the next generation of coffee innovation worldwide.
With the ability to rapidly scale winning ideas, strong profitability, and robust cash generation, Global Coffee Co. will be well positioned to deliver attractive, predictable growth, enhanced by steady cash returns. Beverage Co., with more than $11 billion in annual net sales, will be a scaled challenger in the $300 billion North American refreshment beverage market.
Transformational Movement
KDP CEO Tim Cofer said that the announcement marks a transformational moment in the beverage industry, as they were building on KDP’s disruptive legacy by creating two winning companies, including a new global coffee champion.
“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,” he added.
He added: “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.”
JDE Peet’s CEO Rafa Oliveira said that this highly complementary transaction will deliver an attractive premium for their shareholders and will create compelling future growth opportunities for employees, customers and other stakeholders.
Creating Two Beverage Leaders
Both Global Coffee Co. and Beverage Co. will be positioned to deliver attractive returns to their unique investor bases through distinct financial profiles, with tailored growth and capital allocation frameworks, and optimised operating models calibrated to core categories and geographies.
Upon completion of the acquisition of JDE Peet’s and until the intended separation is complete, the combined company will be led by KDP’s management team, including CEO Tim Cofer and CFO Sudhanshu Priyadarshi.
Upon completion of the separation, Cofer will become CEO of Beverage Co. and Priyadarshi will become CEO of Global Coffee Co. Rafa Oliveira will continue to serve as CEO of JDE Peet’s until the closing of the acquisition. Additional members of leadership and Boards of Directors for both companies will be announced at a later date.
