Beverage giant Keurig Dr Pepper (KDP) announced on its official website that it has reached a definitive agreement with JDE Peet's to acquire the latter in an all-cash transaction.  

According to the press release, after the acquisition is completed, KDP plans to split itself into two independent companies listed in the United States: one focusing on the North American beverage market, and the other dedicated to the global pure coffee business.  

It is understood that JDE Peet's is headquartered in Amsterdam, Netherlands, and owns more than 50 beverage brands, the most well-known of which is Peet's Coffee. As of last Friday's market close, the company had a market capitalization of approximately $15 billion.  

The press release stated that KDP will pay JDE Peet's shareholders €31.85 per share in cash, representing a 33% premium over the latter's 90-day volume-weighted average stock price. The total equity consideration amounts to €15.7 billion (approximately $18 billion).  

KDP CEO Tim Cofer said, "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."  

"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."  

Keurig Dr Pepper was formed in 2018 through the merger of Keurig Green Mountain and Dr Pepper Snapple Group. The former was created by Green Mountain's acquisition of coffee machine company Keurig, while the latter was formed by the merger of Dr Pepper and Seven-Up.  

According to market share data from the “Beverage Digest” in 2023, after years of slow market share growth, Dr Pepper surpassed Pepsi-Cola to become the second-largest soda brand in the United States.  

In the United States, besides Dr Pepper and Seven-Up (outside the U.S., Seven-Up is a registered trademark of PepsiCo), Keurig Dr Pepper also owns brands such as Sunkist and Schweppes, with annual net sales exceeding $11 billion.  

As of last Friday's market close, KDP had a market capitalization of nearly $48 billion, making it the fifth-largest beverage listed company in the United States and the tenth-largest globally, trailing behind Monster Beverage, the parent company of Monster Energy, and slightly ahead of beer brewing group Heineken.  

Keurig Dr Pepper stated in the press release that the acquisition of JDE Peet's will significantly enhance its coffee positioning, allowing it to build a strong, resilient, and diversified global product portfolio.  

Since the merger in 2018, KDP's carbonated beverage brands have performed well, but its coffee division has underperformed due to intense competition. Insiders said that JDE Peet's shareholders also believe that the subsequent spin-off could unlock more value from the soft drink business.  

In July of this year, KDP stated that the performance of its coffee division would remain "sluggish" until fiscal year 2025, reflecting the challenges faced by its home coffee machine platform.  

Some analysts believe that one of the issues facing KDP's coffee business is rising import costs, partly due to tariffs imposed by the Trump administration on multiple countries, particularly the 50% high tariff on Brazilian coffee by the United States.  

KDP CEO Tim Cofer, speaking about the trajectory of the coffee business in the second half of the year during an earnings call, said, "The impact of tariffs will become apparent."