Keurig Dr Pepper acquires Peet's coffee in $18B deal

Keurig Dr Pepper will acquire JDE Peet’s coffee in a just over $18 billion all-cash transaction, according to a Monday announcement. The deal will create a coffee champion by pairing Keurig, North America's leading single-serve coffee platform, with Peet’s’ global coffee portfolio, Keurig Dr Pepper said. Keurig Dr Pepper’s brand portfolio includes various popular beverages, including Dr Pepper, Snapple, 7Up, Hawaiian Punch, and Canada Dry, among others.

After the acquisition, Keurig Dr Pepper planned to split into two separate publicly traded companies, Beverage Co. and Global Coffee Co. Beverage Co. will start with about $11 billion in annual sales and serve as a challenger in North America’s cold refreshment beverage market. Global Coffee Co., will reach across 100 countries and bring about $16 billion in annual revenue with a focus on the global coffee market.

Why the split? Both companies cited coffee as a $400 billion global market that continues to grow. Keurig Dr Pepper has a chance to create a coffee giant by splitting and combining Keurig with Peet’s, CEO Tim Cofer said in a statement. Creating two hyperfocused beverage companies with tailored strategies will cause shareholder value to boom both short- and long-term, he added. Peet’s is excited to team up with Keurig to chart the future of global coffee, Peet’s CEO Rafa Oliveira said in a statement. After the split, Cofer will lead Beverage Co. out of Texas, while Keurig Dr Pepper CFO Sudhanshu Priyadarshi will head up Global Coffee Co. out of Massachusetts.