Keurig Dr Pepper to reshape beverage market with $18B JDE Peet’s acquisition and split

Keurig Dr Pepper is setting the stage for one of the most significant shake-ups in the global beverage industry. The U.S. drinks giant has announced a $18 billion all-cash acquisition of Dutch coffee powerhouse JDE Peet’s, in what is being described as Europe’s largest buyout in over two years. Rather than absorb the company into its existing structure, Keurig Dr Pepper plans to split into two separately listed businesses, one focused on coffee and the other on beverages. 

This bold move signals a strategic departure from its 2018 merger that combined coffee and soft drinks under one roof. With the new configuration, Keurig Dr Pepper aims to sharpen its focus on two distinct growth stories, but how exactly will this acquisition and subsequent split reposition the company in the beverage market?

Keurig Dr Pepper to acquire JDE Peet’s for $18B and split into two listed firms

In a clear demonstration of strategic portfolio reorientation, Keurig Dr Pepper (KDP) is acquiring JDE Peet’s for about $18 billion, including a share price of €31.85 which is a premium of roughly 20 percent over its pre-deal trading price. After closing, the company will undergo a structural overhaul by splitting into two U.S.-listed entities: Global Coffee Co., with estimated annual sales around $16 billion, and Beverage Co., targeting over $11 billion in North American beverage sales.

This deal effectively reverses the 2018 merger that combined Keurig’s coffee operations with Dr Pepper Snapple Group as that failed to deliver consistent performance across both segments. By unbundling coffee from beverages, KDP aims to create two sharply focused businesses. The coffee entity will emerge as the world’s largest pure-play coffee company, poised to challenge industry heavyweight Nestlé, with analysts projecting that the new coffee business will have a market share similar to Nestlé’s, which is around 20 percent in the global coffee and tea consumer packaged goods market.

The proposed split also comes with an ambitious cost-savings initiative primarily through procurement consolidation and manufacturing efficiencies. The two new companies won’t be starting from scratch. Keurig Dr Pepper plans to hand the coffee business to its current chief financial officer, while the existing CEO will stay in charge of the soft-drink side. Investors reacted quickly once the news dropped. JDE Peet’s stock jumped nearly 18 percent, showing excitement about the deal, while Keurig Dr Pepper’s own shares slid, a sign that some on Wall Street are nervous about the size and difficulty of pulling it off.

Still, the plan is pretty straightforward: let coffee and soda grow on their own instead of trying to carry each other. The coffee company will have powerful names like Peet’s, Douwe Egberts, and Tassimo under one roof, giving it reach from single-serve machines to cafés across the world. The beverage company, meanwhile, can focus just on North America, pouring energy into new drinks and keeping up with what consumers actually want.