Keurig Dr Pepper has agreed to buy Dutch coffee group JDE Peet’s for 15.7 billion euros ($18.4 billion) in cash, in a move that could reshape the global coffee market.
The U.S.-listed drinks company, best known for 7UP and Dr Pepper, will pay 31.85 euros per share, about 20% above JDE Peet’s Friday closing price. The deal is one of Europe’s largest takeovers in more than two years and is designed to split coffee and soft drinks into two separately listed companies.
It’s also a partial reversal of Keurig Dr Pepper’s own 2018 merger, when Keurig Green Mountain and Dr Pepper Snapple combined forces.
Markets reacted quickly. JDE Peet’s shares jumped 18% in early trading, their best day on record, while Keurig Dr Pepper’s Frankfurt-listed shares slipped 1.3% by mid-morning.
“This is the right time for this transaction,” CEO Tim Cofer said, calling the merger an “exceptional opportunity” to build a global coffee powerhouse. Cofer will lead the new coffee business, with CFO Sudhanshu Priyadarshi taking charge of the separate beverage unit.
The coffee company, dubbed Global Coffee Co., will bring in roughly $16 billion in annual sales, tapping into a $400 billion global coffee market. Beverage Co., meanwhile, will focus on North America’s $300 billion refreshment market with sales of more than $11 billion.
Analysts say the deal could help Keurig narrow the gap with Nestlé, the world’s largest coffee player. Both companies are contending with soaring bean prices, which have surged due to extreme weather and trade tensions. The costs are expected to rise further after U.S. President Donald Trump imposed a 50% tariff on Brazilian coffee beans starting August 6.
“Rolling the two coffee businesses together makes sense,” said Jon Cox of Kepler Cheuvreux. “It reduces JDE Peet’s reliance on Europe and gives Keurig international reach.”
Keurig is valued at about $48 billion, while Amsterdam-listed JDE Peet’s was worth 12.76 billion euros at Friday’s close. JDE Peet’s owns brands including Jacobs, L’Or, Tassimo, and Douwe Egberts, and is majority-controlled by Germany’s JAB Holding, which also holds a minority stake in Keurig Dr Pepper.
Shares of Keurig Dr Pepper are up nearly 10% this year, while JDE Peet’s stock has almost doubled thanks to steady sales and shareholder-friendly moves.
($1 = 0.8544 euros)
