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After a decade of nonstop mergers in coffee, two of the biggest coffee companies—created by merging other smaller brands—are joining forces. On Monday, news broke that Keurig Dr Pepper (KDP) has agreed to acquire JDE Peet’s for $18 billion, uniting two giants who have been responsible for some of the coffee industry’s most high-profile acquisitions.
As Catherine Larkin and Katerina Petroff report for Bloomberg, the deal is being steered by investment firm JAB Holdings, which owns 69% of JDE Peet’s and nearly 5% of KDP. After the acquisition, KDP plans to split the consolidated mega-corporation into two parts, one focusing on coffee and the other on soft drinks.
Once the deal closes and restructuring wraps in 2026, KDP expects the resulting coffee behemoth, to be known as Global Coffee Co., to generate around $16 billion in annual sales. This will make it the second-largest coffee company in the world behind Nestlé, with control of more than 50 brands, including Green Mountain Coffee, Keurig, Peet’s Coffee, Stumptown, Intelligentsia, and many more.
For JAB, the benefits of this deal are obvious. The investment firm is set to emerge from the deal with more than $12 billion in cash, as it looks to divest from its coffee holdings. Shareholders, on the other hand, are split. JDE Peet’s stock climbed after the deal, and the company’s shareholders will receive a 20% premium over the August 22 closing price. On the other end, KDP’s stock price fell 18%, wiping $8 billion from its value.
JDE Peet’s, based in the Netherlands, controls several international coffee companies, including the Swedish brand Gevalia and Kenco, which is sold in the U.K. and Ireland. This expanded portfolio will give Global Coffee Co. a more global presence, Jon Cox of the financial services firm Kepler Cheuvreux told Reuters. “Rolling the two coffee businesses together makes sense, reducing the European-centric and commoditised nature of most of JDE Peet’s business, and giving Keurig international exposure,” Cox said.
Combining the two multinationals contributes to the ongoing consolidation of the coffee industry, while also offering competition to Nestlé. On LinkedIn, coffee consultant Gerd Mueller-Pfeiffer wrote that, “if executed well, this merger could finally create a coffee champion with the scale, reach, and focus to challenge Nestlé in more than just regional markets.”
“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 JDE Peet’s CEO Rafa Oliveira in a press release. “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.”
Read the full story on more coffee consolidation from Bloomberg here or via Yahoo! Finance here.
