Keurig Dr Pepper (KDP) will acquire European coffee giant JDE Peet’s in a deal worth A$25.9 billion (€15.7 billion), in a major strategic move that will see the company split into two independent, publicly traded businesses.
In Australia, JDE Peet’s owns well-known local coffee brands Campos Coffee and Piazza D’Oro, alongside its global brands Moccona, L’Or, Jacobs, and Pickwick.
Under the agreement, KDP will purchase all outstanding shares of Amsterdam-listed JDE Peet’s for A$52.55 (€31.85) per share in cash, a 33 per cent premium over the company’s 90-day volume-weighted average price.
The deal will pave the way for the creation of two standalone market leaders: one focused on global coffee, the other on North American beverages.
The first, Global Coffee Company, will merge KDP’s Keurig single-serve platform with JDE Peet’s extensive coffee portfolio. The new entity will be headquartered in Burlington, Massachusetts, with international headquarters in Amsterdam, and will be led by KDP’s current CFO, Sudhanshu Priyadarshi.
The second, Beverage Company, will focus on KDP’s iconic refreshment brands, including Dr Pepper, 7Up, Canada Dry, and Snapple. Based in Frisco, Texas, the business will remain under the leadership of current CEO Tim Cofer.
KDP expects the acquisition to deliver A$660 million (€400 million) in cost synergies over three years and to be accretive to earnings from the first year post-closing.
“Through the complementary combination of Keurig and JDE Peet’s, we are seizing an exceptional opportunity to create a global coffee giant,” said Tim Cofer, CEO of KDP.
“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.”
The transaction is subject to close in the first half of next year. The spin-off into two separate companies is scheduled to follow shortly thereafter, pending final legal and board approvals.
