Keurig Dr Pepper has announced its intention to acquire JDE Peet’s in an all-cash transaction that also will combine KDP’s Keurig with JDE Peet’s portfolio of coffee brands.
After the acquisition closes, Keurig Dr Pepper plans to separate into two independent, U.S.-listed publicly traded companies – Beverage Co. and Global Coffee Co.
The acquisition of JDE Peet’s will enhance KDP’s coffee positioning, creating a strong, resilient and diversified global portfolio. It also will unlock incremental operating and financial benefits, including about $400 million in anticipated cost synergies to be realized over three years and EPS accretion expected to start in the first year of the combination.
Upon separation, Global Coffee Co., with about $16 billion in combined annual net sales, will be the world’s largest pure-play coffee company.
With reach across more than 100 countries, including 40 in which the company holds the No. 1 or No. 2 market position by sales, Global Coffee Co. will have a portfolio spanning across all coffee segments, channels and price points.
Coffee is one of the most consumed beverages globally, representing a $400 billion category with rapid growth in emerging markets, and Global Coffee Co. will lead the next generation of coffee innovation worldwide.
Beverage Co., with more than $11 billion in annual net sales, will be a scaled challenger in the $300 billion North American refreshment beverage market.
“Today’s announcement marks a transformational moment in the beverage industry, as we build on KDP’s disruptive legacy by creating two winning companies, including a new global coffee champion,” said Keurig Dr Pepper CEO Tim Cofer.
“Through the complementary combination of Keurig and JDE Peet’s, we are seizing an exceptional opportunity to create a global coffee giant. 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.
“By creating two sharply focused beverage companies with attractive and tailored growth propositions and capital allocation strategies, we are poised to generate significant shareholder value in both the near and long term.”
Upon completion of the acquisition of JDE Peet’s and until the intended separation is complete, the combined company will be led by KDP’s management team, including Cofer and CFO Sudhanshu Priyadarshi.
Upon completion of the separation, Cofer will become CEO of Beverage Co. and Priyadarshi will become CEO of Global Coffee Co. Rafa Oliveira will continue to serve as CEO of JDE Peet’s until the closing of the acquisition. Additional members of leadership and boards of directors for both companies will be announced later.
The global headquarters for Global Coffee Co. will be in Burlington, Massachusetts, and its international headquarters will be in Amsterdam, the Netherlands. Beverage Co. will be headquartered in Frisco, Texas.
“We are excited to join forces with Keurig to chart the future of global coffee by leveraging our combined portfolio of the world’s most beloved coffee brands,” Oliveira said. “This highly complementary transaction will deliver an attractive premium for our shareholders and will create compelling future growth opportunities for our employees, customers and other stakeholders.
“We are incredibly proud of the formidable global platform that we have built at JDE Peet’s and, together with Keurig, we are looking forward to powering a new era of coffee innovation and leadership, building on JDE Peet’s recently announced ‘Reignite the Amazing’ strategy.’”
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