Keurig Dr Pepper to acquire JDE Peet’s, separate into two independent companies
Keurig Dr Pepper (KDP) and JDE Peet’s announced they have entered into a definitive agreement under which KDP will acquire JDE Peet’s in an all-cash transaction.
After the acquisition closes, KDP plans to separate into two independent, U.S.-listed publicly traded companies, creating a scaled growth challenger in North America’s refreshment beverages market (Beverage Co.) and a pure-play coffee company (Global Coffee Co.).
According to KDP, the acquisition of JDE Peet’s will significantly enhance KDP’s coffee positioning, creating a strong, resilient and diversified global portfolio. It will also unlock incremental operating and financial benefits, including approximately $400 million in anticipated cost synergies to be realized over three years and EPS accretion expected to start in year one of the combination.
Upon separation, Global Coffee Co., will lead the next generation of coffee innovation worldwide. With the ability to rapidly scale winning ideas, strong profitability, and robust cash generation, Global Coffee Co. will be well positioned to deliver attractive, predictable growth, enhanced by steady cash returns, KDP said in a statement.
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. With a portfolio of iconic and emerging brands, a differentiated and expanding Direct-Store-Delivery (DSD) system, and a proven, capital-efficient growth model, Beverage Co. will benefit from multiple drivers to continue to win in its vast and fragmented industry. Strong free cash flow will support a dynamic approach to capital allocation and enhance optionality.
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“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 Tim Cofer, CEO, KDP. “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.”
“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,” said Rafa Oliveira, CEO, JDE Peet’s. “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.”
