Keurig Dr Pepper Bets Big on Coffee With €15.7 Billion JDE Peet’s Acquisition

Once the acquisition is completed, Keurig Dr Pepper intends to separate its coffee and soft drink divisions into two standalone U.S.-listed entities next year. Chief Executive Officer Tim Cofer framed the move as a transformative step, stating, “We are seizing an exceptional opportunity to create a global coffee giant.”

The transaction effectively reverses the 2018 merger of Dr Pepper with Keurig, a deal engineered by JAB Holding Co. to forge a powerhouse spanning both hot and cold beverages. However, per Bloomberg, Keurig’s coffee segment has struggled to gain traction amid stiff competition in the U.S. and rising coffee bean costs, while its soft drink unit has fared comparatively better.

The markets reacted sharply to the news. Keurig Dr Pepper shares tumbled 8.9% in New York—the steepest intraday decline in more than five years. Analysts at S&P signaled that the company’s credit rating could be cut, warning about the risks of taking on significant debt to finance what they described as a complex, two-step transaction. Meanwhile, shares of JDE Peet’s surged as much as 18% in Amsterdam trading, per Bloomberg.

The deal comes at a time of intensified consolidation across the food and beverage industry. Companies are contending with shifting consumer demand, elevated inflation, and soaring commodity costs. Coffee futures have climbed over the past year as poor weather disrupted harvests in major producing regions. Adding to the strain, the U.S. has imposed a 50% tariff on imports from Brazil, the world’s leading coffee exporter.

Industry experts suggest the structural split could benefit Keurig Dr Pepper. Barclays analysts wrote that “pure play companies tend to work best” in the fast-moving consumer goods sector. Still, the outlook for the coffee business remains muted. The company reported flat U.S. coffee sales in the second quarter and cautioned that performance would remain subdued for the rest of 2025, partly due to tariffs and inflation. While price hikes on K-Cups provided some cushion, they were offset by lower volumes of single-serve pods and brewers.