In a groundbreaking move, the American beverage giant Dr Pepper is set to acquire the Dutch coffee company JDE Peet’s for a whopping $18 billion, challenging Nestle’s leading position in the global coffee market.
According to the terms of the deal, Keurig Dr Pepper (KDP), commonly known as Dr Pepper, will complete the acquisition at a 20% premium over last Friday’s closing price. The stock price of JDE Peet’s surged by 18% on the Amsterdam stock exchange in response to the news, while KDP’s stocks on the Frankfurt exchange fell by approximately 1.3%.
Analysts have noted that JDE Peet’s has a significant presence in Europe, Latin America, and Asia, and this acquisition will significantly expand KDP’s market coverage beyond the United States. However, investors are concerned about the high acquisition cost and the challenges of post-merger integration, leading to short-term pressure on the stock price.
JDE Peet’s, a major player in the European coffee market, owns brands such as Jacobs, Douwe Egberts, and Peet’s Coffee, commanding a global market share close to Nestle at around 20%. While KDP has held a strong position in North America with its Keurig capsule coffee machines, its international influence has been limited. With this acquisition, KDP will directly inherit JDE’s global market share, cementing its position as the second-largest coffee enterprise after Nestle.
KDP’s CEO Tim Cofer described this as an “extraordinary opportunity” that would lead to the emergence of a new global coffee giant.
Furthermore, KDP announced that post-transaction completion, it would split its business into two separate entities listed in the United States: one focusing on coffee, and the other on non-alcoholic beverages. The company emphasized that the split would allow investors to more clearly assess each entity’s growth potential.
This acquisition comes at a time of rising global coffee prices. Droughts in Brazil and Vietnam have led to tight supply, combined with recent US tariffs on Brazilian coffee imports, further escalating international market costs. Analysts suggest that KDP’s expansion at this time would help diversify risks, strengthen its international coffee footprint, and prevent excessive reliance on a single source or market.
This acquisition marks the most significant adjustment for KDP since the 2018 merger of Keurig and Dr Pepper Snapple. In recent years, KDP has faced intense competition in its domestic coffee business in the US, with declining sales of capsule coffee machines and single-serve pods (K-Cups) and stagnant growth. In contrast, JDE Peet’s, with over 50 brands including Jacobs, L’OR, Peet’s, and Tassimo, exceeded market expectations in the first half of this year. The newly appointed CEO Rafael Oliveira has driven strategic transformation and raised the full-year outlook, underscoring the strategic necessity of KDP’s acquisition of JDE Peet’s.