US drinks giant Keurig Dr Pepper is set to create a new global coffee major after agreeing to buy Dutch coffee firm JDE Peet’s for €15.7bn (£13.6bn) in the largest European acquisition in more than two years.
The deal will unwind the 2018 merger of Keurig and Dr Pepper, with Keurig set to merge with JDE Peet’s to form a new coffee giant. Dr Pepper will return to focusing entirely on soft drinks such as Schweppes and 7up.
JDE Peet’s owns more than 50 brands, including Douwe Egberts, Kenco, and Peet’s Coffee café chain.
Keurig Dr Pepper CEO Tim Cofer said the move was a “transformational moment” that would create “two winning companies, including a new global coffee champion”.
The new soft drinks company will be called Beverage Co and will be led by Cofer. The coffee company will be named Global Coffee Co and headed by current CFO Sudhanshu Priyadarshi. Both will be listed in the US.
The companies expect to save about $400m over three years because of the merger.
Global Coffee Co’s current combined sales are around $16bn, making it similar in size to Nestlé’s coffee business with both accounting for around 20% of the global coffee market, ING analyst Maxime Stranart told Reuters.
Last month, Keurig Dr Pepper told investors they expected growth in its coffee business to be subdued this year, with global coffee prices at record highs due to droughts in Brazil and Vietnam and new US tariffs coming in last month.
Donald Trump imposed a 50% tariff on Brazilian products in July, citing the “witch-hunt” trial against its former president, Jair Bolsonaro.
“Rolling the two coffee businesses together makes sense, reducing the European-centric and commoditised nature of most of JDE Peet’s business, and giving Keurig international exposure,” said analyst Jon Cox of Kepler Cheuvreux.
The deal is expected to close by the first half of 2026, with the split expected to happen by the end of that year.
The deal values JDE Peet’s shares at €31.85, about 20% higher than the price they hit last week.
Keurig Dr Pepper’s share price fell 11% yesterday following the announcement.
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