Beverage conglomerate, Keurig Dr Pepper (KDP), has entered into a definitive agreement to acquire coffee company, JDE Peet’s, in an all-cash transaction. The deal was valued at $28 billion (€15.7 billion), and will create two independent companies from KDP’s existing and acquired brands – Beverage Co and Global Coffee Co.
The agreement was announced on 25 August. Under the terms of the transaction, KDP will pay JDE Peet’s shareholders $56.91 (€31.85) per share in cash, a 33 per cent premium to JDE Peet’s 90-day volume-weighted average stock price. The statement said JDE Peet’s will also pay a previously declared dividend of $0.64 (€0.36) per share prior to closing, with no reduction to the offer price.
The story so far
JDE Peet’s is a classic example of corporate consolidation under the guiding hand of German investment conglomerate, JAB Holding Company, that seems to have a finger in every pie – including KDP.
JDE Peet’s can trace its roots back to Dutch company, Douwe Egberts, which was founded in 1753, bought by Sara Lee in 2012, and then quickly sold to JAB in 2013, under the new name DE Master Blenders. The following year, DE made a $5 billion and a 49 per cent equity interest deal to merge with Mondelez International’s coffee portfolio, and rebranded as Jacobs Douwe Egberts (JDE).
Prior to acquiring Douwe Egberts, in 2012, JAB had bought American roasters, Peet’s Coffee, which it merged with JDE in 2019 to officially form JDE Peet’s. The new entity hosted a huge range of coffee brands – including L’OR, Moccona, Piazza D’oro and Australian-founded brands Harris and Campos Coffee. In 2024, JAB also decided to buy out Mondelez’s shares, bringing its majority ownership to 68 per cent.
What’s interesting to note is that JAB was also pivotal in the rise of KDP, which started out as Green Mountain Coffee Roasters in 1979, and acquired Keurig in 2006. The entity rebranded as Keurig Green Mountain (KGM) in 2014, and was acquired by a JAB-led investor group in 2016. In 2018, KGM acquired the Dr Pepper Snapple Group in another massive deal, creating the third largest beverage group in the US, behind PepsiCo and The Coca-Cola Company.
In that acquisition KGM shareholders ended up retaining 87 per cent of the newly formed KDP, with Dr Pepper holders having 13 per cent – leaving JAB as the majority owner of the conglomerate. It has been steadily lowering its stake since, going from a 34 per cent share in March 2024 to just 4.4 per cent after its most recent divestment in May.
Some quick calculations will show that since the initial 2024 round, JAB has made over $15.34 billion (US$10 billion) from selling off its shares in KDP, and will now receive over $17.87 billion (€10 billion) for its JDE Peet’s stake, making it the real winner of this beverage battleground.
Next steps for KDP
KDP CEO, Tim Cofer, said the agreement marks a transformational moment in the beverage industry, building on the legacy of its brands by creating two new companies.
“Through the complementary combination of Keurig and JDE Peet’s, we are seizing an exceptional opportunity to create a global coffee giant,” said Cofer.
“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 statement said 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 US$400 million in anticipated cost synergies to be realised over three years and EPS accretion expected to start in year one of the combination.
JDE Peet’s CEO, Rafa Oliveira, said the company was excited to join forces with KDP to chart the future of global coffee.
“This highly complementary transaction will deliver an attractive premium for our shareholders and will create compelling future growth opportunities for our employees, customers and other stakeholders,” said Oliveira.
Upon separation of the brands, Global Coffee Co., will be the world’s largest pure-play coffee company, and net approximately $24.55 billion (US$16 billion) in annual sales, while Beverage Co will make over $19.95 billion (US$11 billion).
Although JDE Peet’s share price rose by 17.6 per cent with the announcement, it seems not all stakeholders were happy with the deal, with KDP’s dropping by almost the same margin. It is yet to be seen whether it will creep back up or stabilise at the lowered rate.
