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Keurig Dr Pepper will buy a Dutch coffee group for over $18 billion and split into two companies

Keuring Dr Pepper will break up into a soft drinks company and a coffee group. Richard B. Levine/Levine-Roberts/Sipa

Keuring Dr Pepper will break up into a soft drinks company and a coffee group. Richard B. Levine/Levine-Roberts/Sipa

London — Keurig Dr Pepper will acquire JDE Peet’s – whose brands include Douwe Egberts, Kenco and Peet’s Coffee – for more than $18 billion and split into two listed businesses.

The company behind Dr Pepper and 7Up drinks and Keurig coffee products is set to separate into a soft drinks company and a coffee group, according to a joint statement published Monday.

Keurig Dr Pepper will pay the shareholders of the Dutch company €31.85 ($37.26) per share in cash, representing a total purchase price of €15.7 billion ($18.4 billion.)

Once the transaction is complete, the aim is to create two separate companies: Beverage Co. and Global Coffee Co.

Shares in Keurig Dr Pepper (KDP) slid 8% Monday morning after the deal was announced.

Dr Pepper was the second-most popular soda in the United States last year, below just Coca-Cola and ahead of Pepsi. But coffee is even more popular with Americans, who drink 516 million cups every day.

The US is the largest importer of coffee in the world. Climate change, world conflicts, tariffs imposed by President Donald Trump and growing demand are all making the commodity more expensive, with prices almost doubling in the past five years.

“This is the right time for this transaction,” Tim Cofer, the CEO of Keurig Dr Pepper, said in the statement, noting the company’s position “of operational and financial strength, momentum across our evolved portfolio and increasing coffee category resilience.”

Newcomer Global Coffee Co., with around $16 billion in expected annual sales, will be the world’s largest “pure-play” coffee company, selling coffee in more than 100 countries, according to the statement.

The combined business will be split “as soon as practicable.” Beverage Co. will have Cofer at the helm, while Sudhanshu Priyadarshi, Keurig Dr Pepper’s chief financial officer, will head up Global Coffee Co.

Keurig Dr Pepper was formed in 2018 following the merger of Keurig Green Mountain and Dr Pepper Snapple.

John Towfighi and Rosa de Acosta contributed to this report.

Author: Editors Desk

Source: CNN:::

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