Today's Edition
(THE NEW YORK TIMES)
Keurig Dr Pepper said Monday it would acquire European coffee company JDE Peet’s for roughly $18 billion in the latest megadeal by food companies trying to stay a step ahead of changes in consumer demand.
After completing the all-cash acquisition, Keurig Dr Pepper plans to combine its coffee business, which includes its namesake single-serve coffee pods, with JDE Peet’s and spin it into a new company. The remaining beverage business would include brands like Dr Pepper, Snapple and 7UP.
The two-step transaction is aimed at effectively undoing the multibillion-dollar combination of Keurig and Dr Pepper announced in 2018.
In the past several years, the coffee industry has slowed significantly, amid surging coffee bean prices, softening demand and stiff competition from cheaper store brands. As a result, the coffee business has become a drag for Keurig Dr Pepper.
The deal with JDE Peet’s would create "two sharply focused beverage companies with attractive and tailored growth propositions,” Timothy Cofer, CEO of Keurig Dr Pepper, said in a statement.
The new coffee company, with roughly $16 billion in annual sales, will have headquarters in Burlington, Massachusetts, with international headquarters in Amsterdam. The beverage business, with about $11 billion in annual sales, will be based in Frisco, Texas.
Keurig Dr Pepper said the deal, which would need to be approved by shareholders and regulators, was expected to be completed in the first half of 2026. If the deal breaks down, JDE Peet’s will owe Keurig Dr Pepper a termination fee of more than $180 million.
Based in the Netherlands, JDE Peet’s has cobbled together nearly 50 coffee and tea brands from all over the world, including L’Or from France, Jacobs coffee from Germany and Ti Ora tea from New Zealand. In the first half of this year, sales at JDE Peet’s rose 19.8%, to just under $6 billion, largely because of price increases.
CEO Rafa Oliveira told analysts in July that JDE Peet’s was better positioned than many of its American competitors to weather the impact of tariffs, because less than 30% of coffee it uses comes from Brazil.
Cofer will become CEO of the beverage business, and Sudhanshu Priyadarshi, Keurig Dr Pepper’s chief financial officer, will lead the new coffee business.
